Tax and Vat Compliance Services

VAT is an indirect tax levied on the value of goods and services at each stage of production and supply. The VAT system in Bangladesh is based on ‘tax credits’ or input tax rebates.

VAT compliance in Bangladesh is an essential legal process for every business. According to the ‘Value Added Tax and Supplementary Duties Act’ of 2012, the compliance process begins with obtaining a 13-digit Business Identification Number (BIN) issued by the National Board of Revenue (NBR).

In order to do it, each company must first obtain a VAT registration certificate. In order to maintain regular business operations, such as participating in tenders, banking activities, tax services, exporting and importing goods, and so on, you are required to register for VAT and get a Business Identification Number.

The Customs, VAT and Excise Department of the National Board of Revenue is in charge of administering VAT regulations (NBR). The Value-Added Tax, commonly known as VAT, is an example of such an indirect tax that is paid by the consumer via a registered consultant.

The amount of value added tax, that must be paid on a certain item of goods or provision of service is computed by first determining the amount of the applicable input tax that must be paid, and then adding this amount to the product’s or service’s actual level of value. The Value-Added Tax, is an automated taxation system that is based on the credit for input tax against a supply or sale.

The VAT that was paid on the purchase tax of the products or service at the time of purchase is accepted by the supplier as a credit against the VAT that was included in the price during the time of sale of such goods or services, and the supplier is responsible for paying the net amount of VAT.

Step by Step Process of VAT Compliance & Registration

The process of applying for a VAT registration is free, but in order to be eligible, you need to fulfill certain conditions. In order to support your application, you will need to give the appropriate information.

This will also lessen the likelihood of any delays arising while your request is being processed.

Any business that imports, exports, or supplies taxable goods and services is required to participate in the VAT process in order to avoid penalties.

This participation takes place with the VAT procedure either via the process of registering or enrolling. In order to comply with the VAT legislation, he is required to apply for a Business Identification Number in the way that is specified. This falls within the jurisdiction of the VAT law. In addition, in accordance with the requirements of the VAT law, acquiring a Business Identification Number (BIN) in the allotted amount of time is referred to as registering or enlisting.

The Value-Added Tax and Supplementary Duty Act of 2012 mandates that all commercial organizations must now register for VAT in order to comply with the law. 

Mandatory VAT registration:

Those who have a yearly selling price that falls between BDT 5 million and 30 million are the ones who are required to register for turnover VAT. However, this pricing does not include the following retail cost, which is as follows:

1. the price of the supply that is free from taxation;
2. the price at which capital assets may be purchased;
3. the price at which an organization or component of an economic activity may be purchased; Or
4. the value of supplies produced as a direct consequence of the complete and permanent cessation of economic operations;

Those who have an annual selling price that is more than BDT 30 million are the ones who will be required to register for the mandatory VAT.

Regardless of the amount they sell their goods or services for, the following individuals or enterprises are required by law to register for VAT: 

1. All individuals and businesses that are responsible for providing, manufacturing, or importing products or services that are subject to an additional duty levy
2. Manufacturers / Service Providers / Business Suppliers / Shops located in Super shops and shopping malls / Establishments in City Corporations and District Cities as per General Order No. 17.
3. All persons and organizations that provide goods or services in response to a bid, contract, or work order Individuals and institutions that are involved in the import-export trade

Those who are exempt from having to register for VAT are as follows:

Which have an annual sales value of less than fifty lakh taka and are not connected to the kind of company described in the previous sentence. The first schedule details the categories of goods and services that are exempt from VAT.

Business Identification Number (BIN)

The Business Identification Number (BIN) is a unique identifier for a company that is issued to a person on the basis of the gross revenue generated by his economic activity. This identifying number is not capable of determining the kind or scope of an individual’s economic activity. A taxpayer’s identification number is a unique string of nine digits that is used to uniquely identify them. This number, which may be found on the NBR website, can be used to determine the state in which a tax payer’s business is currently operating.

If the limit of the yearly turnover of your economic activity is higher than the stipulated limit, you are required to file an application to the Commissioner using Form VAT 2.1. Following the completion of the necessary checks and inspections, within three business days you will be given a Registration Certificate/Turnover Tax Enlistment Certificate in Form-VAT 2.1 that has a BIN derived from the VAT system. This document will be issued in your favor. A BIN is not available to each and every person. Although anybody may submit a request for a BIN at no cost, only those who are eligible will be granted one and be allowed to keep it.

Required Documents for BIN Registration 

For the convenience of our valued clients, here is a short list of documents that might be required of you depending on the type of business you are performing in Bangladesh. These include: 

1. Mobile number.
2. A valid email account.
3. Address of the Organization: 
   1. In accordance with the trade licence.
   2. In accordance with the operational unit.
4. Total number of employees.
5. Details Regarding the Turnover:
   1. Transactions completed by the business in the preceding year.
   2. Transactions anticipated to be completed during the next year approximately.
6. Principal Field of Economic activities.
7. For the manufacturing companies:
   1. Information Regarding Inputs and Outputs 
   2. A Plan for the Layout of the Equipment
   3. A List of the Machinery and Equipment 
8. Last e-BIN 9 Digits or 11Digits 
9. Licence of Import registration with the list of items to be imported along with the Harmonic System Code (HS Code).
10. Registration and licensing for exports (If Necessary).
11. Trade License.
12. Bank Statements of the previous year.
13. E-TIN of the Company.
14. Copies of national identity cards and passports of all the directors of the company.
15. Memorandum of Association, Articles of Association, and certificate of incorporation.
16. Details of the authorised person who will be in charge of maintaining the e-Bin services:
    1. National Identity card.
    2. Mobile number.
    3. Email.
    4. Designation of the person in the company.
17. Any additional documents that might be deemed necessary.