The member-turned-shareholders of the demutualised Dhaka and Chittagong stock exchanges will have to pay 15 per cent tax on profits when they sell their shares of the bourses, according to a circular of National Board of Revenue. The profit will be calculated by deducting the original acquisition price of shares of the bourse from the selling price, said the NBR circular issued recently.
The government in the 2014-15 budget introduced tax on share sales of the stock exchanges after the bourses became demutualised entities or profit-oriented companies in November 2013.
‘All the current shareholders, who bought memberships of the bourses before the demutualisation, will have to pay 15 per cent tax if they sell any share of the bourse,’ an NBR official told New Age.
‘For example, if the shares were bought at Tk 100 and now the sales price is Tk 1,000, the profit will be Tk 900 and the NBR will impose 15 per cent tax on the profit,’ he said.
The member-brokers of the DSE received 72.10 lakh shares each and the CSE members received 42.87 lakh shares each at a face value of Tk 10 each share when the bourses were turned into companies.
The shareholders of the bourses, however, had demanded one-time tax exemption for selling of the shares before the government announced budget in June.
The NBR also imposed 15 per cent tax on sale-proceed of trading right entitlement certificate (TREC) of the member-turned-shareholders.
NBR officials said as the demutualised stock exchange members received the TREC without any cost, so the entire sale-proceed of TREC would be counted as profit and would be subjected to 15 per cent tax.
In November 2013, the Dhaka and Chittagong stock exchanges became demutualised bodies or profit-oriented companies under the Demutualisation Act 2013 passed by parliament on April 29.
The members also received TREC for conducting business as stockbrokers.
-With New Age input
