Microsoft gets VAT registration

Microsoft, the introducer of the most widely used operating system Windows, yesterday got value added tax (VAT) registration from the National Board of Revenue (NBR), a development that would enable the revenue authority to get the tech company under its monitoring.

Microsoft is the fourth tech giant after Google, Facebook and Amazon that got registration from the VAT Commissionerate Dhaka South in the last two months.

Microsoft Regional Sales Pte Ltd, Singapore registered for a business identification number (BIN) on behalf of the leading American tech company, said SM Humayun Kabir, commissioner of VAT Commissionerate Dhaka South.

"We will now get returns from these tech companies and do auditing after the companies get registration," he said.

Kabir said the NBR was getting revenue as banks used to deduct VAT during payments to these companies by clients for taking services such as giving advertisement digitally.

"Now we will get a clear picture of how much revenue we are getting from the global technology companies," he said.

The Podder & Associates will act as the VAT agent for Microsoft, said Pramila Sarker, additional commissioner of VAT Commissionerate Dhaka South.

Sarker said they were in a process of getting LinkedIn and Netflix under VAT registration.

The global tech companies started getting registered with local VAT authority two years after the NBR made rules in July 2019.

The rules say digital companies will have to either set up offices in Bangladesh or appoint agents such that the government can collect VAT generated through online advertisements, sales of software and electronic services provided by them to local firms.

Internet companies were unwilling to set up representative offices here.

Also, through agents, the tech firms were uninterested to deposit VAT, paid ultimately by the consumers, to the NBR or share data on sales containing information about customers on the ground of privacy breaches and security risks.

Finally, in order to bring them under the tax net, the NBR in early 2020 revised rules so that digital companies can get BINs without opening offices here.

Over the last one year, progress of bringing tech firms under the VAT had been slow. The companies started signing up for BIN over the last two months.