FAQ , Taxation

What is the policy for Value Added Tax in Bangladesh?

Oct 12, 2021

A new VAT and Supplementary Duty Act was approved by the parliament in 2012 and came into effect in Jul. 2019. The general rate of VAT remains at 15%. Although VAT is imposed on goods/ services at each stage of import, manufacturing, delivery or trading, Bangladesh makes an extensive use of truncated base tax assessment, where the businesses with annual sales over BDT 8 million shall pay a turnover tax of 15% in lieu of VAT.

The rules regulating VAT refunds are defined more precisely in the new act. Excess payment of input VAT over output VAT is to be carried forward for the subsequent six tax periods. If the excess payment cannot be exhausted over the periods, taxpayer is eligible for a refund, to be paid within three months of application.

All companies are mandated to obtain VAT registration certificate, that is followed by acquisition of Business Identification Number (BIN) for tax filling. Application for VAT registration shall be submitted to a (deputy) VAT commissioner. After proper scrutiny, a registration certificate addressing BIN (or turnover tax enlistment certificate) would be then issued via the VAT system within three working days.