Netflix gets VAT registration in Bangladesh

The USA-based subscription streaming service and production company Netflix has received the Value-Added Tax (VAT) number from the National Board of Revenue (NBR).

The Web streaming giant on Wednesday received the business identification number registration from the Dhaka South VAT Commissionerate.

Netflix used its Singapore address and received the registration with the name of Netflix PTE Limited, Singapore.

The matter was confirmed to The Business Standard by SM Humayun Kabir commissioner, Custom, Excise, and Vat Commissionerate Dhaka South.

He said PricewaterhouseCoopers will be their local consultant. Netflix will now pay a 15% VAT on revenue derived from Bangladesh from December.

NBR made it mandatory for tech giants to either set up offices in Bangladesh or appoint agents so that the government can collect VAT on the advertisements and other services provided by them to local firms in July 2019.

Netflix is a subscription-based business model making money with three simple plans: basic, standard, and premium, giving access to stream series, movies, and shows. The company is profitable, yet it runs on negative cash flows due to upfront cash paid for content licensing and original content production.

As of October 2021, Netflix has over 214 million subscribers worldwide, including 74 million in the United States and Canada, 70 million in Europe, the Middle East, and Africa, 39 million in Latin America, and 30 million in Asia-Pacific. The company posted a net income of $2.761 billion during its 2020 Fiscal Year, which ended 31 December 2020.

Netflix has a large number of subscribers in Bangladesh. Earlier in this financial year, Google, Facebook, Amazon, and Microsoft obtained their business identification number from the National Board of Revenue. These multinationals are now paying VAT regularly to NBR.