This makes them the second big tech after Facebook to pay VAT in Bangladesh
Leading big tech and popular search engine Google has paid Tk2.3 crore in value-added tax (VAT) to the National Board of Revenue (NBR).
This makes them the second big tech after Facebook to pay VAT in Bangladesh, after the social networking giant paid Tk2.44 crore on July 29 earlier, both of which are registered with the Dhaka South VAT Commissionerate.
According to the Dhaka South VAT Commissionerate, a VAT of Tk55.78 lakh against the returns of last May has been filed by the foreign institution, and another Tk1.74 crore for June.
The company deposited the money to the government treasury on Thursday from the Citibank NA branch in Singapore.
PricewaterhouseCoopers (PwC), Google’s local consultant, confirmed saying: “The returns have not reached the government as of yet, it had just made its way into the country as of now. We had to sign forms as per procedure once it made its way here and it will be deposited into the bank accounts on the next working day following the submission of challan.”
The search engine giant was one of the first foreign companies to register with NBR acquiring a business identification number (BIN) in Bangladesh in May to avail VAT-related services, including VAT payment and VAT return submissions.
So far, four non-resident organizations have registered for VAT.
Other companies besides Google are Facebook, Amazon, and Microsoft, which do not have local offices but have appointed local consultants on their behalf.
Earlier, the NBR amended the VAT Act to provide direct VAT benefits to companies.
According to the Value Added Tax and Supplementary Duty Act, 2012, companies like Facebook, YouTube, and Google have to register for VAT and set up offices in Bangladesh or hire VAT agents.
An additional commissioner at NBR, requesting anonymity, told Dhaka Tribune that the government prior to the tech company registering was getting revenue from Google with the help of the Bangladesh Bank.
“Bangladesh bank was collecting VAT from Google through Google AdSense. It gives us the amount after charging for their work. But from now we can get VAT directly from Google as it is registered now,” he added.
Tech companies like Facebook, Google, YouTube, and Microsoft have been earning revenue from ads and the government took steps to address revenue loss from the tech companies.
NBR sources said that it was decided international tech companies like Facebook, Google, YouTube and Microsoft would not be able to conduct business in Bangladesh without VAT registration.
According to that decision, these companies will either have to set up offices in Bangladesh, or hire VAT agents.
If they wanted to do business in Bangladesh, then they would have to pay taxes to the government for conducting its business here.
In other words, there are some more complications including not having a permanent office in Bangladesh, which may be solved permanently in the proposed budget for the fiscal year 2021-22.
Currently, only the provision of hiring a VAT agent in case of payment of VAT is applicable at present.
If resolved, the issue of hiring an agent will remain as an alternative opportunity. Currently, under VAT law, local VAT agents are responsible for paying VAT.
Companies have been facing various problems since 2019 to get VAT registration and submit VAT returns.
There was a demand from them to get this service directly as per VAT law.
But due to legal complications, foreign companies had to hire VAT agents to get VAT services.