Major international businesses failed to submit their VAT returns on time to Bangladesh tax authorities, owing to the complexities of VAT compliance.
According to local reports, two tech giants, Amazon and Google, were among the firms that failed to meet Bangladesh’s VAT submission deadline.
According to the reports, the nonresident tech giants don’t have bank accounts in Bangladesh. They thus face difficulties transferring the requisite cash.
Calls to make VAT compliance more transparent
Amazon has previously voiced concern about the automatic VAT deduction currently in place in Bangladesh. When a customer in Bangladesh purchases an item through a digital platform such as Amazon, the bank automatically deducts VAT. This raises the potential issue of double taxation or other inconsistencies.
To make the VAT payment process simpler and more accountable, Amazon wants such payments handled by an intermediary, facilitated by an auditor.
The complexity of global VAT compliance
VAT compliance is challenging at the best of times, especially in specialised industries. However, as we can see, operating as a nonresident company adds another layer of complexity
The implications, from a VAT perspective, aren’t different in each region. For instance, a new law compels major tech companies to establish a local presence in Russia. Whereas in Oman, there is no threshold for nonresident companies. That is, any nonresident company that supplies goods or services to customers in Oman must register and account for VAT.
The variation from country to country is part of the reason that VAT is considered the most complex of taxes.
Moreover, local VAT registrations are not simply a question of compliance. In some instances, there are clear advantages to registering for VAT in a country in which you do business, even if you are not obliged to do so. (For instance, if you import into the UK, VAT registration enables you to take advantage of preferential VAT mechanisms.) At the same time, registering creates a new set of obligations. An effective VAT expert should help you determine the optimal course of action.
A simple global VAT solution
Global VAT regulations are complex. But compliance doesn’t have to be difficult. As global VAT specialists, Vatglobal will ensure your company is always 100% VAT compliant, in every country in which you have an obligation. We’ll provide the strategic advice you need to make informed VAT decisions. And our powerful VAT technology makes compliance simple and efficient.