Amazon moves to pay VAT to NBR

Staff Correspondent | Published: 23:16, Feb 26,2020


Amazon Web Services, a global leading cloud computing service provider, has started procedures to pay value-added tax in Bangladesh on cross-border transactions as it has taken a move to update the database of their local clients.

AWS Inc has recently sent messages to its customers in Bangladesh to update their accounts with the company by providing business identification numbers (BIN), known as VAT registration numbers.

The message has been sent to all types of customers — businesses, resellers and individuals — saying that AWS will soon be required to collect Bangladeshi VAT at the rate of 15 per cent on sales of its cloud services to customers which are not VAT registered.

The National Board of Revenue in the budget for the current fiscal year 2019-2020 brought the global technology companies and social media giants operating in Bangladesh without their own offices under the VAT net and imposed 15 per cent VAT on their digital services, including advertisements on social media and cloud computing services like web hosting, from July 1.

So far, no such companies, including Facebook, Google and Youtube, obtained BIN from the revenue board even after eight months of framing the regulations.

Though Facebook, Google and Microsoft, among others, have been requesting to solve a number of issues to facilitate them in obtaining VAT registration number and payment of VAT, apparently Amazon is the first company that took such step.

An Amazon client told New Age that all accounts of businesses and resellers with AWS should be updated with their own BINs.

Jashore VAT commissioner Md Zakir Hossain said that it was very good news in collecting VAT from cross-border transactions.

The NBR needs to do monitoring and vigorous awareness campaign so that other companies soon start the process of VAT payment, he said.

Facebook, Google and Microsoft on several occasions requested the revenue board to address the issues, including allowing them to directly register for VAT with the NBR instead of registering through a VAT agent, payment of VAT directly from their own bank accounts and deferral of the implementation of the  provisions until addressing the problems.

Officials said that the NBR was yet to give any decision on these issues to the companies,

known as non-resident company in the VAT and Supplementary Duty Act-2012.

NBR member (VAT implementation and IT) Md Jamal Hossain on Wednesday told New Age that VAT policy wing of the NBR would soon issue an order on the issue.

Hopefully, the problem would be solved following issuance of the order, he said.

Former Bangladesh Association of Software and Information Services (BASIS) president AKM Fahim Mashroor said that Bangladeshi clients had to depend largely on international technology giants for all types of services like web hosting.

More than 90 per cent of web hosting services are provided by global tech companies, he said.

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