Banks asked to deduct 20% tax on FB, Google ad revenues
UNB || BusinessInsider
Bangladesh Bank (BB) has instructed banks to deduct a maximum of 20 percent tax on revenues from digital marketing for social media platforms including Facebook and television radio.
The Foreign Exchange Policy Department of the Central Bank issued a circular in this regard on Monday.
Bangladesh Bank has asked Authorized Dealer (AD) banks engaged in foreign exchange transactions to follow the instructions of the Income Tax Ordinance 1984 in sending remittances (payment) in favor of non-resident institutions.
According to the guidelines, the foreign company will have to pay tax at the rate of 15 percent, while repatriating the income from the advertisement spread through the use of the country's internet.
In other words, social media companies like Facebook and YouTube have to pay this tax. The BB instructed 20 percent tax to be paid while taking the income from 'Television-Radio'.
According to the circular, any advertisement, promotion, or marketing of content on social media or websites will be considered digital marketing.
In this case, the applicable tax rate is 15 percent till June 30, 2023. But any content or advertisement broadcast on television or radio shall not be considered as digital marketing.
The broadcast of any advertisement on television or radio will only be considered advertisement broadcasting. In this case, the tax rate is 20 percent.