Bangladesh VAT


Frequently asked questions about Bangladesh VAT

What is VAT?

VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services supplied for use or consumption in Bangladesh as well as imports from outside Bangladesh. VAT is a consumption tax because it is ultimately borne by the final consumer.

Who must pay VAT?

Generally, VAT is invoiced by the supplier that is selling taxable goods or services and collected from the customer. Subsequently, the supplier declares the VAT collected on sales and remits the VAT to the tax authorities on a monthly basis.

Zoom is registered for VAT in Bangladesh as a non-resident supplier of electronically supplied services. As such, Zoom is required to collect VAT on supplies to customers who are not registered for VAT in Bangladesh and remit the VAT to the tax authorities in Bangladesh.

If you are VAT registered in Bangladesh, you should provide your Business Identification Number (“BIN”) to Zoom (see ‘How do I enter my Business Identification Number (“BIN”)?’ below for details on how to do this). If the BIN is valid, then no VAT will be charged on the supplies made to you by Zoom. If you do not provide a valid BIN to Zoom, then VAT will be charged on the supplies made to you by Zoom.

Why am I being charged VAT?

Video conferencing and telecommunication services supplied by Zoom fall under the category of Electronically Supplied Services (“ESS”) since it is supplied through an internet or an electronic network system. Therefore, Zoom (as a non-resident) is required to charge VAT on such supplies at the standard rate of VAT provided the supplies are made to non-VAT registered customers in Bangladesh.

What is a BIN?

A BIN is a unique 13-digit number assigned by the National Board of Revenue to businesses that are registered for VAT in Bangladesh.

How do I enter my BIN?

To provide your BIN, follow the steps below depending on where your billing portal is located in the left navigation menu of the Zoom web portal. Not sure how to identify where your billing portal is located? Learn how to locate your billing settings.

Zoom performs periodic validation checks of customer BINs to ensure that the BIN remains valid. If, during these periodic validations, it is identified that your BIN is invalid, Zoom may automatically update your account so that future invoices are subject to VAT. Where this happens, VAT will be charged on all future invoices until such time that a valid BIN is provided.

You are required to notify us if there is a change to your VAT registration status.

Billing portal under Plans and Billing

  1. Sign in to the Zoom web portal.
  2. In the navigation menu, click Plans and Billing then Billing Management.
  3. In the Contact Information section, click Edit.
  4. If selected, clear the Not VAT Registered check box.
  5. Enter your BIN.
  6. Click Save.

Billing portal under Account Management

  1. Sign in to the Zoom web portal.
  2. In the navigation menu, click Account Management then Billing.
  3. Click the Billing Information tab.
  4. To the right of Sold To Contact, click Edit.
  5. If selected, clear the Not VAT Registered check box.
  6. Enter your BIN. 
  7. Click Save Changes.

Does Zoom have a BIN?

Yes, Zoom is registered for VAT in Bangladesh as a non-resident supplier of electronically supplied services and Zoom’s BIN will be shown on the invoice it issues to you.

How is Zoom determining which customers VAT applies to?

If a customer's ‘Sold To’ location is in Bangladesh, and the customer has not provided a valid BIN, Zoom will charge VAT on its invoices issued to you. This information is subject to cross-referencing against other data to verify that the ‘Sold To’ country is accurate.

It is your responsibility as a customer to ensure that your ‘Sold To’ address is accurate.

Are there any special exemptions or zero-rating applicable for charities or other business organizations under which VAT may not be charged?

There are no VAT exemptions applicable in respect of electronically supplied services to non-profit organizations or international agencies in Bangladesh. Accordingly, Zoom is required to charge VAT to all customers who are not registered for VAT and have not provided a valid BIN.

Are there any VAT obligations for me as a customer?

If you have provided a valid BIN to Zoom, no VAT will be charged on the supplies made to you. However, in such case, supplies made by Zoom will be considered as an ‘import of services’, and accordingly, you are required to self-assess the VAT payable under the “reverse charge” mechanism.

There is no VAT reporting obligation for a customer who is not registered for VAT in Bangladesh as Zoom will charge VAT on its supplies to you and remit such VAT to the tax authorities.

What if I have a BIN and forget to enter it?

The BIN can be entered at any time. If a valid BIN is entered before the issuance of the next invoice, Zoom will not charge VAT on the next invoice or future invoices issued to you. If a valid BIN is not entered at the time of issuance of the next invoice, VAT will be charged until a valid BIN is entered. No retrospective adjustments will be made to invoices where you did not provide a valid BIN to Zoom.

Decision tree – My “Sold To” address is Bangladesh; will I be charged VAT?

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Disclaimer

Every customer is unique and so are their specific tax circumstances. The above-stated information should not be considered as tax advice, but as a general overview of relevant VAT rules in Bangladesh. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.