After Google, Facebook, Microsoft signs up to pay taxes in Bangladesh

Tech giant Microsoft Corporation has done the same as Facebook and Google and registered to pay Value Added Tax or VAT in Bangladesh.

Senior Correspondentbdnews24.com
Published : 1 July 2021, 02:58 PM
Updated : 1 July 2021, 02:58 PM

The company signed up to pay VAT on sales of its products, advertisement revenue and other earnings in the country on the first day of the new financial year on Thursday.

Microsoft was awarded VAT registration at the Custom, Excise and VAT Commisionerate’s divisional office at Segunbagicha, Additional VAT Commissioner (Dhaka South) Pramila Sarker told bdnews24.com.

Earlier, Facebook and Google registered to pay VAT at the National Board of Revenue. Using its address in Ireland, Facebook registered in the name of three organisations.

Microsoft, which is based in the United States, used its address in Singapore to gather its Business Identification Number or BIN, signing up with the name Microsoft Regional Sales PTE Ltd.

“The company used the Singaporean address 182 Cecil Street,. #13-01 Frasers Tower. Singapore 069547 in the registration,” Pramila said.

“Microsoft has been paying taxes for their business in Bangladesh for many days. The relevant agencies used to submit the amount to the NBR by deducting the tax against banking or any digital transactions.

“But we had been asking multinational companies, including Microsoft, to directly do VAT registration to simplify tax payments in Bangladesh.”

“We were missing the accounts of how much money we were getting and how much was going abroad,” she explained.

Pramila then spoke about the obligations of VAT registration for companies to continue doing business in Bangladesh under the VAT Act 2012, which is currently being implemented.

“We’ve told several companies including Microsoft about the matter in virtual meetings. The companies have been showing interest to sign up as well.”

According to the Value Added Tax and Supplementary Duty Act 2012, 15 percent VAT has to be paid on taxable imports and supplies.

In June 2019, the NBR issued a circular asking internet services like Facebook, Google and YouTube and non-resident broadcast services like the radio and television to appoint representatives to continue business in Bangladesh by paying VAT.

After hearing a writ petition, the High Court in November 2020 ordered the authorities to collect revenue, including tax at source and other taxes on all sorts of transactions for advertisement, domain sale, licence and other fees, from internet-based platforms like Google, Yahoo, Facebook, YouTube and Amazon.

The telecom regulators BTRC in a report submitted to the High Court in June 2019 said the five mobile phone operators of Bangladesh paid Google, Facebook, YouTube, Yahoo, WhatsApp, Amazon, Imo and other internet-based firms nearly Tk 87.5 billion in five years in advertisement revenue.

The NBR, in another report submitted at the same time, said the amount was Tk 1.33 billion in five years.