Bangladesh digital services withholding VAT

Bangladesh is to impose its Value Added Tax on foreign provided digital and electronic services. It will do so by requiring banks and other payment providers to withhold the 15% VAT on credit card payments to offshore providers.

Bangladesh introduced VAT in July 2019.

VAT has been due on digital services since July 2018. This includes streaming or download media and web-based services to consumers.

However, compliance has been limited due to foreign currency payment restrictions. Bangladesh customers must convert their local earnings into US$ to pay their subscriptions. Local banks may not withhold VAT on foreign currency payments on credit cards without Bangladesh Central Bank instructions. This requirement is now to be removed.

Check Avalara's global digital services VAT guide.