Note on Convention… US and Bangladesh… Taxes on Income, Sept 26, 2004

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Excellency :

I have the honor to refer to the Convention signed today
between the Government of the United States of America and the
Government of the People's Republic of Bangladesh for the
Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income. The following
understandings were reached between our two Governments:

1\. If the United States reaches agreement on the provision
of a tax sparing credit with any other country, the United
States agrees to reopen negotiations with Bangladesh with a view
to the conclusion of a protocol which would extend a tax sparing
credit under the treaty.

2\. In applying Article 7 (Business Profits) to any case
where the information available to the tax authorities is
inadequate to determine the profits to be attributed to such
permanent establishment, the profits properly attributable to
the permanent establishment may be determined on a reasonable
basis applying principles consistent with Article 7.

If these understandings meet with the approval of the
Government of the People's Republic of Bangladesh, this note and
your reply thereto will indicate that our Governments share
these understandings.

Accept, Excellency, the renewed assurances of my highest
consideration.

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Excellency:

I have the honor to acknowledge receipt of Your
Excellency's note of today which reads as follows:

"I have the honor to refer to the Convention signed today
between the Government of the United States of America and the
Government of the People's Republic of Bangladesh for the
Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income. The following
understandings were reached between our two Governments:

1\. If the United States reaches agreement on the provision
of a tax sparing credit with any other country, the United
States agrees to reopen negotiations with Bangladesh with a view
to the conclusion of a protocol which would extend a tax sparing
credit under the treaty.

2\. In applying Article 7 (Business Profits) to any case
where the information available to the tax authorities is
inadequate to determine the profits to be attributed to such
permanent establishment, the profits properly attributable to
the permanent establishment may be determined on a reasonable
basis applying principles consistent with Article 7.

If these understandings meet with the approval of the
Government of the People's Republic of Bangladesh, this note and
your reply thereto will indicate that our Governments share
these understandings."

The foregoing understandings being acceptable to the
Government of the People's Republic of Bangladesh, I have the
honor to confirm that our Governments share these
understandings.

I take this opportunity to renew to Your Excellency the
assurance of my highest consideration.