Internet giants, including Google and Facebook, and other non-resident providers of electronic broadcast services through TV and radio in Bangladesh will have to appoint agents in the country to pay value added tax (VAT).
The National Board of Revenue (NBR) asked such firms or individuals to register for VAT in a notice on Wednesday noting that Bangladesh is implementing the VAT law in the 2019-20 financial year starting from July 1, reports bdnews24.com.
Besides Google and Facebook, the notice mentioned YouTube, Viber, Messenger, and WhatsApp through which message, voice, advertisements and similar services are provided.
Copies of the notice have also been sent to the information secretary and Bangladesh Telecommunication Regulatory Commission or BTRC chairman for further action.
Earlier this year, the government had decided to collect 15 per cent VAT from the advertisements on internet platforms like Facebook and YouTube.
The authorities have not been collecting any tax from the Bangladeshi advertisers of the virtual world until then.
The government moved to collect the taxes following a High Court order last year for the authorities to tax the transactions on Bangladeshi advertisements posted on Google, Facebook, YouTube and other similar websites.
The Bangladesh Bank asked all the banks to collect the VAT on such transactions.
Related people have long been alleging that the money paid by the Bangladeshi advertisers is going out illegally, causing huge amount of revenue loss as the government was not taxing the advertisers.
Meanwhile, Facebook, Google, Amazon, and other large technology firms face criticism for cutting their tax bills by booking profits in low-tax countries regardless of the location of the end customer.
Such practices are seen by many as unfair.
The group of 20 finance ministers agreed earlier this month to compile common rules to close loopholes used by global tech giants such as Facebook to reduce their corporate taxes, Reuters had reported.
The US government, however, has voiced concern in the past that the European campaign for a "digital tax" unfairly targets US tech giants.
Earlier this year, countries and territories agreed a roadmap aimed at overhauling international tax rules that have been overtaken by the development of digital commerce.
