Banks have been instructed to tax the transaction on Bangladeshi advertisements posted on Google, Facebook, YouTube, and other similar websites.
In an official order on Monday (Mar 4), Bangladesh Bank’s Banking Regulation and Policy Department told top commercial bank executives to implement the National Board of Revenue’s (NBR) decision of a 15 percent value-added tax (VAT).
Citing a provision of the 1991 VAT Act, it said that advertisements posted on these websites would be taxed as they constitute as the supply of services from outside the country.
Section 3.3.d of the Act says that 15 percent VAT will be imposed, “in case of supply of services from outside the geographical area of Bangladesh, the recipient of service;”
The NBR’s move comes after the High Court ordered authorities last year to tax advertisements posted on social media sites and by search engines.
The court mentioned search engines Google and Yahoo, global e-commerce platform Amazon, social media website Facebook and video-sharing website YouTube in its order.
Besides the advertisements, all other transactions like domain sale, licence fees will be under tax-at-source, duty and all other sorts of taxes, it said then.
A large number of local businesses, as well as multinationals operating in Bangladesh now, prefer advertising online, especially on social media sites, with the spending rising day by day.