OTT platforms: Are Netflix, Hoichoi coming under the tax net?

The government has moved to bring foreign over-the-top (OTT) platforms that do business in Bangladesh without maintaining a physical office or permanent presence in the country under the tax net.

To this end, the Finance Bill 2026 proposes a new criterion for determining a company’s “digital presence.”

Under the proposed legislation, a non-resident or foreign company will be deemed to have a digital presence in Bangladesh if it has 100,000 or more digital customers or subscribers in the country. In such cases, the company may become subject to Bangladesh’s tax laws, as its subscriber base would be treated as constituting a “permanent establishment.”

Speaking on condition of anonymity, an official from the Income Tax Wing of the National Board of Revenue (NBR) told Prothom Alo, “Without a permanent establishment, the right to impose tax cannot be established. That is why we have classified these digital platforms as permanent establishments. This is the first step toward taxation.”

He added that even if legal complications prevent taxation from being imposed immediately, efforts to bring such platforms into the tax framework will continue.

The proposed provision would place the operations of popular international OTT platforms under the scrutiny of the tax authorities. Streaming services such as Netflix, Amazon Prime Video, Disney+ Hotstar, and Hoichoi currently enjoy widespread popularity in Bangladesh and have substantial subscriber bases. Their popularity and customer numbers continue to grow steadily.

With the rapid expansion of the digital economy, many foreign companies are generating revenue from the Bangladeshi market without maintaining any physical office in the country. However, under the existing tax framework, much of that income remains beyond the reach of local tax authorities.

The government hopes to address this gap through the new provision. If classified as permanent establishments, these foreign streaming companies could become liable to Bangladesh’s corporate tax rate of 27.5 per cent.

Analysts, however, believe implementation of the proposal could prove difficult because of Bangladesh’s double taxation avoidance agreements (DTAAs) with various countries.

Netflix, for example, is a United States-based company. Under the tax treaty between Bangladesh and the United States, a company generally cannot be treated as a permanent establishment without a physical office or place of business. Bangladesh has similar agreements with 43 countries. As a result, even NBR officials remain uncertain about how effectively taxes can be imposed on digital platforms under the proposed framework.

Tax experts also argue that introducing taxation through the Finance Bill alone will not be sufficient. According to them, the relevant double taxation agreements must first be amended before such taxes can be effectively imposed.

Snehasish Barua, Director of the tax consultancy firm SMAC Advisory Services, told Prothom Alo, “Under Bangladesh’s income tax law, international double taxation avoidance agreements take precedence over domestic legislation. Existing treaties generally place emphasis on a company’s physical presence when determining taxing rights. Therefore, unless these international agreements are amended, implementing the new rule may not necessarily result in successful tax collection.”

He further warned that attempting to implement such legislation without adequate research and preparation could create complications with Bangladesh’s trading partners.