Nonresident companies are currently not permitted to pay their VAT via an online payment facilitated by a foreign bank. Instead, they must deposit the amount owed into a specified local bank.
Facebook has requested that the Bangladesh National Board of Revenue permit the company to make online payments directly to tax authorities.
Numerous large firms that do not have a local presence in Bangladesh have reported difficulties complying with the country’s complex VAT compliance requirements. Recently, Amazon and Google did not meet their VAT deadlines in Bangladesh, reportedly because they do not have local bank accounts.
Automatic VAT deductions on digital purchases
It’s not the first time foreign tech companies have asked for enhancements to VAT compliance regulations in Bangladesh. Amazon has expressed concern about the protocol by which VAT is automatically deducted on purchases made via a digital platform. The company worries that the lack of transparency could potentially lead to double taxation or other VAT irregularities.
Tech giants continue to register for Bangladesh VAT
While tech giants want to see changes to the country’s VAT procedures, they nonetheless continue to operate in Bangladesh. Microsoft recently registered for VAT with the NBR, following in the footsteps of Facebook, Amazon and Google.
Tax authorities around the world are continuing to update regulations to meet the demands of the digital economy. Foreign companies selling goods or services to customers in Bangladesh should pay close attention to potential regulatory changes that might affect nonresident firms.
Claimable countries & VAT rates
VAT potential calculator
Invoice compliance checklist