Metro rail advertising tax status sparks VAT dispute

Annex Communications Ltd has asked the National Board of Revenue (NBR) to clarify whether revenue earned from advertising on the Dhaka Metro Rail should be treated as advertising services or rental of immovable property for VAT purposes.

According to NBR sources, the company recently wrote to the tax authority seeking recognition of metro rail advertising as a service, arguing that the current VAT provisions have created uncertainty over the applicable tax treatment.

Annex Communications, the contracted agency responsible for advertising inside trains operated by Dhaka Mass Transit Company Ltd (DMTCL), said advertising on the metro does not constitute leasing immovable property. Instead, it is a specialised advertising service that provides access to a targeted audience.

In its letter, the company argued that advertisers neither own nor exercise exclusive control over the trains, making the activity fundamentally different from property rental. It also noted that metro rail advertising in countries including India is generally classified as an advertising service for tax purposes.