1. If any business is restructured under any law in force inside or outside Bangladesh, the tax arising therefrom shall be determined in accordance with the provisions of this part.

2. Where any capital gain arises from any transfer of capital asset in a scheme of amalgamation, no tax shall be charged under the provisions of this Act:

Provided that, in the scheme of amalgamation, any consideration of any form and in any manner received by the shareholders of the amalgamating companies other than the shares of the amalgamated company shall be treated as taxable income and the tax shall be payable at the applicable rate.

3. Subject to the provisions of section 70, the amalgamated company formed in the scheme of amalgamation may so set-off and carry forward the accumulated loss or the unabsorbed depreciation of the amalgamating companies as its own accumulated loss or unabsorbed depreciation, as if such accumulated loss or unabsorbed depreciation allowance had been incurred from time to time by the amalgamated company.

4. The value of the capital assets of the amalgamated company formed in the scheme of amalgamation shall not exceed the written down value of the capital assets shown in the accounts of the amalgamating companies and in case of revaluation of the capital assets, no depreciation or amortization allowance shall be claimed on the revaluation surplus.

5. Where capital assets are transferred from the demerged company to the resulting company as a result of demerger, the capital gain arising from such transfer shall not be subject to tax under the provisions of this Act:

Provided that where the shareholders of the demerged company receive any consideration other than the shares of the resulting company, or where the value of the shares received from the resulting company is higher than the value of the proportionate shares of the demerged company then the excess amount shall be treated as taxable income and the tax shall be payable at the applicable rate.

6. Subject to the provisions of section 70, in the case of demerger the accumulated loss or unabsorbed depreciation allowance of the demerged company shall be treated as the accumulated loss or unabsorbed depreciation allowance of the resulting company as follows—

(a) any accumulated loss or unabsorbed depreciation allowance, directly related to the undertaking, transferred to the resulting company shall be claimed by the resulting company as its own accumulated loss or unabsorbed depreciation allowance as if the accumulated loss or unabsorbed depreciation allowance had been incurred from time to time by the resulting company;

(b) any such accumulated loss or unabsorbed depreciation allowance not directly related to the undertaking transferred to the resulting company shall be distributed first between the demerged company and the resulting company in proportion to the holdings of assets of any undertaking and thereafter the proportionate accumulated loss or unabsorbed depreciation allowance may be claimed by the resulting company as its own accumulated loss or unabsorbed depreciation allowance as if the accumulated loss or unabsorbed depreciation allowance had been incurred from time to time by the resulting company;

7. In case of demerger, the value of the capital assets of the resulting company shall not exceed the written off value of the capital assets shown in the accounts of the demerged company in the year of demerger and in case of revaluation of the capital assets, no depreciation or amortization allowance shall be claimed on the revaluation surplus.

8. For the purpose of this part—

1. “undertaking” means—

(a) any part of any undertaking;

(b) any unit or department of any undertaking;

(c) any full-fledged business activity; or

(d) any such assets or liabilities of an undertaking or any combination thereof constituting a business activity;

2. “amalgamated company” means—

(a) any company with which the amalgamated company or companies are merged; or

(b) any company formed by amalgamation of two or more companies;

3. “amalgamation”, in relation to companies, means the merger of one or more companies with another company, or the merger of two or more companies to form a new company, by such process which results in-

(a) all the assets of the amalgamating(merging) company or companies immediately before the merger become the assets of the amalgamated company;

(b) all the liabilities of the amalgamating company or companies immediately before the merger become the liabilities of the amalgamated company; and

(c) where the amalgamated company is a Bangladeshi company, shareholders holding not less than 75% (seventy five percent) in value of the shares in the amalgamating company or companies shall become shareholders of the amalgamated company; or where the amalgamated company is a foreign company, shareholders holding not less than 75% (seventy five percent) in value of the shares in the amalgamating foreign company or companies that, directly or indirectly holds or hold shares in a Bangladeshi company or companies, shall become shareholders of the amalgamated company:

Provided that,-

(i) if any amalgamated company holds shares of the amalgamating company, directly or through a nominee, immediately before the amalgamation, then 75% (seventy five percent) shall be computed from the value of the shares remaining after deduction of that holding; and

(ii) if any subsidiary of the amalgamated company, directly or through a nominee, holds shares of the amalagamating company immediately before the amalgamation, then 75% (seventy five percent) shall be computed from the value of the shares remaining after deduction of that holding.

4. “amalgamating company” means—

(a) any company which merges with another company; or

(b) any company which merges with another company for the purpose of forming a new company;

5. “demerged company” means a company where any of its undertakings have been transferred to the resulting company as a consequence of the demerger;

6. “demerger” means any arrangement whereby a demerged company transfers one or more of its undertakings to a resulting company in such a manner that—

(a) all the assets of any undertaking of the demerged company immediately before the demerger, become the property of the resulting company;

(b) all the liabilities of any undertaking of the demerged company immediately before the demerger, become the liabilities of the resulting company;

(c) all the assets and liabilities of any undertaking of the demerged company immediately before the demerger, are transferred to the resulting company at the value stated in the books of accounts of the demerged company;

(d) where the resulting company is a Bangladeshi company and the shareholders holding not less than 75% (seventy five percent) in value of the shares in the demerged company become shareholders of the resulting company; or where the resulting company is a foreign company and the shareholders holding not less than 75% (seventy five percent) in value of the shares in the demerged foreign company that directly or indirectly hold shares in a Bangladeshi company become shareholders of the resulting company;

(e) assets and liabilities are transferred to the resulting company as an active business:

Provided that,—

(i) if any resulting company holds shares of the demerged company either directly or through a nominee immediately before the demerger, 75% (seventy-five percent) shall be computed from the value of the remaining shares after deduction of that holding; and

(ii) if any subsidiary of the resulting company directly or through a nominee holds the shares of the demerged company immediately before the demerger, 75% (seventy-five percent) shall be computed from the value of the remaining shares after deduction of that holding.

7. “resulting company” means—

(a) any such company to which any undertaking of the demerged company is transferred as a consequence of the demerger; or

(b) any resulting company as a consequence of the demerger;

8. “business restructure” means—

(a) amalgamation; and

(b) demerger.