A file photo shows the headquarters of the National Board of Revenue in the capital. The National Board of Revenue has called on the Bangladesh Bank to relax inbound remittance procedures to facilitate the payment of VAT by non-resident foreign companies like global tech giants. – Photo New Age
The National Board of Revenue has called on the Bangladesh Bank to relax inbound remittance procedures to facilitate the payment of VAT by non-resident foreign companies like global tech giants.
He also asked the central bank to order all commercial banks to submit details of the amount of VAT withheld at source while remitting corporate profits to the BNR within seven days of deduction.
Global tech giants including Google, Facebook and Amazon, which have obtained the Business Identification Number (BIN), also known as the VAT registration number, will have to pay VAT as well as VAT returns from July, tax administration officials said.
But companies were unable to file their VAT returns due to procedural issues, they said.
Currently, a recipient is required to complete a declaration form on the purpose of the remittance, known as “Form C,” if they receive more than $ 10,000 in inbound remittances from abroad, they said. .
In this case, the government or BNR is the beneficiary of inbound remittances payable by non-resident foreign companies that do not have physical offices in Bangladesh, they added.
“The NBR has asked the central bank to remove the reporting requirement for the NBR if it receives more than $ 10,000 in inbound payments from these companies,” said a senior NBR official.
There is no obligation to report if you receive a larger loan amount or project funding from abroad.
Global tech giants will be able to file their VAT returns from August, the official said.
The BNR made the decision during a meeting with stakeholders on the determination of the terms of payment of VAT by companies.
At the meeting held on June 24 under the chairmanship of NBR (VAT policy) member Md Masud Sadiq, the revenue council also decided that non-resident foreign companies would deposit the amount of VAT on the “collection account”. government revenue ‘held at the Gulshan branch. from Sonali bank.
Sonali Bank will then deposit the VAT received to the relevant economic code through the challan treasury as soon as possible and will inform the BNR and the relevant VAT agent of the company, according to the meeting minutes.
During the meeting, the BNR asked the VAT agents of foreign companies to take steps to ensure that other non-resident foreign companies register for VAT as soon as possible.
Google, Facebook and Amazon obtained their VAT returns in May and appointed PricewaterhouseCoopers (PwC) as their local VAT agent.
At the meeting, representatives from Standard Chartered Bank and Citi Bank NA requested guidance from the BNR regarding double taxation issues on foreign company profits.
They said foreign companies would now be able to issue a VAT challan against fees for the services.
If banks deduct VAT when remitting the amount, it will create a possibility of double taxation, they said.
The BNR, however, has taken no decision on the matter, saying the existing VAT deduction process will remain in place until a new decision is made.
According to the BNR, banks typically deduct VAT while transferring business profits abroad.
But the BNR was unable to verify the actual VAT liability and VAT payment because the companies did not file VAT returns.
From now on, the BNR will be able to cross-reference the question because companies will have to file VAT returns.
Businesses will also have to pay additional VAT if the actual VAT payable is greater than the amount deducted or if any amount of VAT is not withheld at source.
Subhash Chandra Das, Financial Director of Sonali Bank, Md Shahadat Hossain, Representative of PwC, Rakesh Shaha, Partner of Ernst & Young Advisory Services, Farhana Marium, Co-Director of the Bank of Bangladesh and Kazi Farid Uddin Ahmed, First Secretary of the NBR, attended the meeting.