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The National Board of Revenue has completed procedures, including making changes in the VAT registration form and modification of the VAT online software, to give non-resident foreign companies such as Google, Facebook and Youtube direct access to the system.
The global technology giants will now be able to obtain business identification number, submit VAT returns and pay VAT directly through their overseas bank accounts.
Officials of the revenue board said that the VAT Online Project of the board had already completed the process to give the companies direct access to the system.
The global social media giants will also be able to pay VAT from outside the country from their own bank accounts, they said.
In November 2020, VAT wing of the NBR amended the VAT form making it suitable for global technology firms which do not have any offices in Bangladesh.
The VOP on April 14 inserted the amended form in the automated VAT system.
The firms since 2019 had been demanding direct access to the system as the NBR initially barred the firms to directly obtain VAT registration number and pay from their bank accounts and asked them to appoint local agents to do the job on behalf of the firms.
There was a provision of having local address and bank accounts for getting direct access to the VAT online system.
Google, Facebook, Microsoft and Netflix wrote several letters requesting the NBR to allow them obtain the services directly as they do not have any permanent establishment in Bangladesh.
According to the VAT and Supplementary Duty Act-2012, a non-resident business not having physical presence in the country must have to appoint an agent for executing its VAT-related activities.
Local VAT firms were also reluctant to become agents as there is a provision which makes the agents jointly responsible with the non-resident foreign companies to pay VAT in case of VAT evasion detected by the NBR.
The revenue board is also planning to make the appointment of agent optional for the non-resident foreign companies, officials said.
The amendment may be incorporated in the VAT law in the upcoming national budget, they said.
Foreign companies have also demanded addressing some other issues, including the possibilities of dual VAT deduction on the services as banks also deduct VAT during remitting the payment while consumers also pay VAT on the services.
Officials of the NBR said that they were also working to address the issues in the budget for the fiscal year 2021-2022 to facilitate non-resident companies to be VAT compliant.
The VOP may take steps to establish connectivity with the mobile phone number of the representatives of the non-resident companies to ensure authentication, they said.
Currently, the revenue board is receiving VAT at the rate of 15 per cent from the companies as banks deduct the VAT at the time of remitting the money to the accounts of the firms.
But it is not possible for the VAT officials to determine the actual payable VAT amount if the firms do not file the VAT returns, they said.
