Local agents of international tech giants like Facebook, Google, IMO, and Youtube will need separate VAT registration numbers for each of the companies.
The National Board of Revenue’s (NBR) decision is for companies that run their business in Bangladesh through agents. Once implemented, the international tech companies will have to take new VAT registration numbers.NBR sources said these companies will take VAT registration from Dhaka South Customs and the VAT Commissionerate.
In June last year, the government made it compulsory for Foreign television, radios and electronic service providers like Facebook, Google, Youtube, messenger, IMO and Whatsapp, which are getting advertisement from Bangladesh, to appoint their VAT agent here and obtain VAT registration.
In the budget for 2019-20 fiscal, the government has proposed imposing VAT and Supplementary Duty Act 2012 on digital services. Under this law, 15 percent VAT will be applicable on advertisements.
As per the law, non-residents who are providing various types of services through television, radio and other electronic means has to appoint VAT agents in the country and obtain VAT registration.
Satellite channels such as Zee Bangla, Star Jalsha, Jalsha Movies and some other foreign channels are airing advertisements in Bangladesh.
On the other hand, Facebook, Google, Youtube, Messenger, Whatsapp, Yahoo, Amazon and IMO are also getting Bangladeshi advertisements.Most multinational companies, including mobile phone operators, fast-moving consumer goods companies, ride-sharing and e-commerce platforms and other digital service companies spend hugely on advertisements.
The spending is increasing rapidly and some digital agencies have already sprung up to take care of this business segment.
On April 12, 2018, the High Court ordered the government to realise appropriate tax, VAT and other charges from revenues earned by different digital platforms like Google, Facebook, Amazon, Yahoo and YouTube.
Bangladesh Bank recently asked all banks to be strict on the payment procedure and deduct 15 percent VAT on overseas payments for online purchases and adverts on digital platforms as a measure to collect VAT on payments for advertisements published or services taken from digital and social media platforms.
The move came following a request from the NBR on deducting VAT on payments for internet services, adverts on digital platforms and other related services received from abroad.