The National Board of Revenue has requested the Bangladesh Bank to ease the procedures for inward remittance to facilitate VAT payment by non-resident foreign companies like global technology giants.

It has also requested the central bank to instruct all commercial banks to submit the details of VAT amount deducted at source while remitting the earnings of the companies to the NBR within seven days of deduction.

Global technology giants, including Google, Facebook and Amazon, which obtained business identification number (BIN), also known as VAT registration number, will have to pay VAT along with VAT returns from July, officials of the revenue board said.

But the companies could not file their VAT returns due to procedural problems, they said.

Currently a beneficiary is required to fill in a declaration form about the purpose of the remittance, known as the ‘form-C’, if he or she receives more than $10,000 as inward remittance from abroad, they said.

In this case, the government or the NBR is the beneficiary of inward remittance to be paid by the non-resident foreign companies that do not have physical offices in Bangladesh, they added.

‘The NBR has requested the central bank to remove the condition of making the declaration for the NBR in case of receiving more than $10,000 inward remittance from such companies,’ a senior NBR official said.

There are no requirements of making the declaration in case of receiving higher amount of loan or project financing from abroad.

Global technology giants will be able to file their VAT returns from August, the official said.

The NBR made the decision at a meeting with stakeholders on determining the procedures for VAT payment by the companies.

At the meeting held on June 24 with NBR member (VAT policy) Md Masud Sadiq in the chair, the revenue board also decided that the non-resident foreign companies would deposit the VAT amount to the ‘government revenue collection account’ maintained at Gulshan branch of Sonali Bank.

Sonali Bank then will deposit the received VAT to the economic code concerned through treasury challan as soon as possible and inform the NBR and the VAT agent concerned of the company, according to the meeting minutes.

At the meeting, the NBR requested the VAT agents of the foreign companies to take steps so that other non-resident foreign companies take VAT registration as soon as possible.

Google, Facebook and Amazon obtained their VAT returns in May and appointed PricewaterhouseCoopers (PwC) as their local VAT agent.

At the meeting, representatives of Standard Chartered Bank and Citi Bank NA sought directives of the NBR regarding double taxation issues on earnings of the foreign companies.

They said that foreign companies now would be able to issue VAT challan against the charges for the services.

If banks deduct VAT while remitting the amount, it will create possibility of double taxation, they said.

The NBR, however, did not make any decision on the issue saying that the existing VAT deduction process would remain in place until any further decision is made.

According to the NBR, banks generally deduct the VAT while remitting the earnings of the companies to abroad.

But the NBR could not crosscheck the actual VAT liability and VAT payment as the companies did not file VAT returns.

Now the NBR will be able to crosscheck the issue as the companies will have to file VAT returns.

The companies will also have to pay additional VAT if the actual VAT liability is higher than the deducted amount or any VAT amount is not deducted at source.

Sonali Bank chief financial officer Subhash Chandra Das, PwC representative Md Shahadat Hossain, Ernst & Young Advisory Services partner Rakesh Shaha, Bangladesh Bank joint director Farhana Marium and NBR first secretary Kazi Farid Uddin Ahmed, among others, attended the meeting.