(1) If any income is payable to a non-resident by reason of or as a result of the transfer of assets, whether jointly with a single or joint venture, such income shall be deemed to be the income of such person who-

(a) acquired by means of such transfer or through collaborative activities any such right by virtue of which he is entitled to enjoy the income immediately or subsequently, payable to the said non-resident;

(b) received or entitled to receive at any time any money paid or payable by way of loan or repayment of debt or any other money in respect of such transaction or collaborative activities, but not paid or payable as income or as full monetary value.

(2) Income which is payable to a non-resident and is deemed to be the income of a person referred to in the said sub-section (1) shall be deemed to be income for all purposes of this Act, whether the said income is taxable otherwise than under the provisions of this section.

(3) The provisions of this section shall not apply, if the Deputy Commissioner of Taxes is satisfied that-

(a) such transfer or collaborative activities did not involve one or more purposes of tax avoidance; or

(b) in all such transfer or collaborative activities involved in actual business transactions and no plan were implied for tax avoidance.

(4) No income which has been treated as income and taxed under subsection (1) shall not again be treated and taxed as part of the income of any person.

(5) For the purposes of this section, a person shall be deemed to have the capacity to enjoy income payable to a non-resident if-

(a) such income is actually calculated to secure the benefit of the person in any form at any time;

(b) contributes to increase in the value of any asset in the possession or benefit of such person as a result of the receipt or generation of such income;

(c) the person received or is entitled to receive at any time such benefit as is or may be as described hereinafter-

(i) from such income; or

(ii) from such money, which is or may be realized as a result available;

(d) such person reserves the right to enjoy the benefit of such income with or without the consent of any other person by appointment, cancellation or otherwise by exercise of power;

(e) Such person is capable of directly or indirectly controlling the use of such income in any manner whatsoever.

(6) For the purpose of determining whether a person has the capacity to enjoy the income, the result and effect of any transfer and collaborative activities and any benefit of any nature or kind arising to such person at any time as a result of such transfer or collaborative activities shall be considered.

(7) For the purposes of this section-

(a) “asset” shall include any property or right and in the case where the asset transferred is a right, in that context the term “transfer” shall include the creation of such right;

(b) in relation to any transfer, “collaborative activities” shall mean any activities performed by a person in connection with the following matters, namely:-

(i) any assets transferred;

(ii) any income derived from such assets; or

(iii) any asset directly or indirectly replicating any transferred asset, or accrued income arising from such asset;

(c) ”benefit” includes payment of any kind;

(d) “any asset representing the transferred asset, or any accumulated income arising from the said asset” shall includes a reference to the shares or liabilities of the company to which or to the person to whom the asset or income or accumulated income is transferred, or also a reference to the liability of that person; and

(e) Any company incorporated outside Bangladesh shall be treated as non-resident.