Microsoft faces VAT payment transfer crisis in Bangladesh
Microsoft has delayed submission of its value-added tax returns for the months of June and July due to a payment transfer crisis and has obtained approval for late submission of the returns for the months concerned.
The global technology giant has set up the processes related to VAT payment transfer and is seeking internal approvals for encashment of VAT payment against transfer funds to global designated banks in Bangladesh and will file its VAT returns in a timely manner after resolving the issue of point of fund transfer.
Microsoft Regional Sales Pte Ltd income tax manager submitted a letter to the National Board of Revenue in this regard on Thursday, saying that they were discussing with their global designated bank in Bangladesh to remit the VAT liability amount from its Singapore bank account which will take a few more days.
Microsoft collected its business identification number on July 1 and received its VAT registration under the name of Microsoft Regional Sales PTE Limited from the Customs, Excise and Vat Commissionerate Dhaka South against its Singapore address.
Regarding the issue, officials of the Customs, Excise and Vat Commissionerate Dhaka South said that Microsoft Regional Sales PTE Limited had to submit the VAT returns by September.
‘We have given permission to the company for late submission of the VAT returns due complexities in bank clearance process as non-residents are not allowed to pay VAT directly from their foreign bank accounts through bank transfer or online payment,’ the officials said.
According to the Value-Added Tax and Supplementary Duty Act-2012, taxpayers have to deposit the amount of VAT returns on a monthly basis by the 15th day of the subsequent month. At present, the global technology giants are submitting their VAT returns through their local representatives or their global designated banks in Bangladesh.
The NBR’s VAT wing in 2019 brought non-resident foreign companies under the VAT net and made VAT registration mandatory for the firms.
The NBR amended the VAT rules on April 14 from making it flexible for the global technology firms to obtain BINs, submit VAT returns and pay VAT directly through their overseas bank accounts over the VAT Online system.
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.