The Bangladesh Bank has instructed banks to deduct up to 20 per cent tax on revenues from digital marketing for social media platforms, including Facebook and Google.
The Foreign Exchange Policy Department of the central bank issued a circular in this regard on Monday.
The regulator also asked Authorised Dealer (AD) banks engaged in foreign exchange transactions to follow the instructions of the Income Tax Ordinance 1984 in sending remittances (payment) in favour of non-resident institutions.
According to the guidelines, the foreign company will have to pay tax at the rate of 15 per cent, 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 Google have to pay this tax. The Bangladesh Bank instructed 20 per cent tax has 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 website will be considered as digital marketing.
In this case, the applicable tax rate is 15 per cent 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 per cent.
