FEPD Circular Letter No. 04: Clarification of Digital Marketing and Advertisement Broadcasting under Section 56 of the Income Tax Ordinance 1984

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka. www.bb.org.bd

FEPD Circular Letter No. 04 Date: 08 May, 2023

To
All Approved Dealer Banks engaged in
Foreign Exchange Transactions.
Head Office.

Dear Sir,

Context regarding the clarification of "Digital Marketing" and "Advertisement Broadcasting" according to Section 56 of the Income Tax Ordinance 1984.

Reference is drawn to the letter number 08.01.0000.033.22.116 dated 17/04/2023 issued by the National Board of Revenue on the subject cited above.

In the matter mentioned above, banks are deducting tax at various rates from different customers under Section 56 of the Income Tax Ordinance 1984 for remitting funds in favor of non-resident institutions. In this regard, the National Board of Revenue has clarified the terms "Digital Marketing" and "Advertisement Broadcasting" through their letter dated 17/04/2023. In this context, instructions have been given to follow the applicable tax rate for the aforementioned services until 30 June 2023. It is mentioned that the National Board of Revenue's letter states that if any letter containing different interpretations on this matter has previously been issued by the National Board of Revenue, it shall be considered invalid from the date of issuance of this letter.

Please kindly inform all concerned parties regarding this matter.

Yours faithfully,

(Signature)
(Md. Sarowar Hossain)
Director (FEPD)
Phone: 9530123

Enclosure: As described

*

Government of the People's Republic of Bangladesh National Board of Revenue [Tax Policy Wing] Agargaon, Dhaka www.nbr.gov.bd

Number: 08.01.0000.033.22.116 Date: 04 Baisakh, 1430 Bangabda 17 April, 2023 AD

Subject: Clarification regarding "Digital Marketing" and "Advertisement Broadcasting" according to Section 56 of the Income Tax Ordinance. Reference: Bangladesh Bank's letter number FEPD(Remittance Policy-2)2(4)/2023-1306, Date: 09-03-2023

In response to the subject cited above, the following clarification is issued:

Sl No	Type of Service/Payment	Description of Service/Payment	Applicable Tax Rate until 30 June 2023
1	Digital Marketing	If any advertisement is promoted using the internet, i.e., if any advertisement is promoted on social media or a website, or if any content is promoted or marketed, it shall be considered Digital Marketing. Any content or advertisement broadcast on any television or radio channel shall not be considered Digital Marketing.	15%
2	Advertisement Broadcasting	If any advertisement is broadcast on any television or radio channel, it shall be considered Advertisement Broadcasting. If any advertisement is promoted using the internet, i.e., if any advertisement is promoted on social media or a website, or if any content is promoted or marketed, it shall not be considered Advertisement Broadcasting.	20%

2. If any letter containing different interpretations on this matter has previously been issued by the National Board of Revenue, it shall be considered invalid from the date of issuance of this letter.

(Signature)
(Bapan Chandra Das)
Second Secretary (Tax-11)
Tax Policy Wing
National Board of Revenue

A.K.M. Romijul Islam
Additional Director
Foreign Exchange Policy Department, Remittance Policy Branch-2 Bangladesh Bank