International VAT Guides – Bangladesh
VAT rates in Bangladesh
How much is VAT in Bangladesh?
The Standard VAT Rate in Bangladesh is 15%.
There are different types of reduced rates.
Some supplies are exempt from VAT. The goods and services that are exempt from VAT often cover basic foods, medicines, and educational services that are pivotal for the general public.
| Bangladesh VAT Rate | Rate Type | Coverage and imposition |
| 15% | Standard Rate | This applies to all taxable supplies in the country besides those that can benefit from being zero-rated or VAT-exempted |
| 10% | Reduced Rate | Repairing and servicing; |
| 7.5% | Reduced Rate | Procurement services; Accommodation services( no – AC hotel sector) |
| 5% | Reduced Rate | Different kinds of food; ride sharing services; some online services; |
| 0% | Zero Rate | Exports |
Based on the existence of a broad spectrum of different Bangladesh VAT rates, the appropriation of the adequate Bangladesh VAT rate for the deemed supply can be a difficult task. To shorten the research, and ease the digestion of the information the National Bureau of Revenue has prepared many guidelines in this regard.
VAT threshold in Bangladesh
The VAT Act, and other supplementary implementing Decrees and Guidelines are the main point of referral for locating the proper answers for indirect tax challenges. The VAT threshold in Bangladesh is one of the basic principles that determine if economic operator X is obliged to register.
VAT registration threshold for resident businesses: Threshold of BTD 30 million in the period of any 12 consecutive months
VAT registration threshold for non-resident businesses: Some non-resident businesses with a fixed place of business in Bangladesh could profit from being VAT exempted when the mandatory threshold isn’t reached beforehand.
VAT registration threshold for foreign providers of digital services: No threshold
VAT Taxable Activities in Bangladesh
Types of taxable activities that mandate the VAT registration:
- Supply of goods and services for consideration
- Exports
- Imports of goods and services
- Supply of digital services
The road that led to the imposition of the VAT liability for foreign providers of digital services has been very extensive and challenging. Different sets of rules and regulations have been adopted, or should have been adopted, but at the last minute they have been removed from the legislative agenda.
Some foreign platform operators have asked NBR to obtain a possibility to register for VAT(without having a fixed place of business in the country) but have been blocked from doing so. The only chance was to adhere to the services of a local agent.
However, after a few years and direct negotiations with tax authorities, they have obtained permission to register directly and bear sole responsibility for VAT payable.
The supplier of goods or provider of services should be aware that the scope of supply that mandates the registration according to the Bangladesh VAT rules is extensive.
Tax Representative in Bangladesh
The dependency on having a fiscal agent for related VAT requirements in the country, for non-resident economic operators cannot be considered in a general set of terms and conditions. Depending on the type of supply, the acquisition of the services of the fiscal agent can be decided.
Tax registration
Standard Registration
Domestic as well as non-resident businesses should follow the standard registration procedure. The submission of the mandated documentation should be processed online.
Simplified tax registration
In Bangladesh foreign providers of digital services don’t have a possibility to register in the simplified manner. There are some updates that should be arranged in the future.
VAT on Electronically Supplied Services in Bangladesh
Digital Services
Foreign providers of electronically supplied services should register for VAT in Bangladesh and charge an adequate VAT rate for their supplies.
How much is VAT in Bangladesh for Electronically Supplied Services?
VAT rate Bangladesh: In most cases the VAT rate in Bangladesh for the supply of digital goods and services is 15%. However, noteworthy in comparison with other countries is that according to the Bangladesh VAT rules, there is no uniformity concerning the VAT rate that is levied on the provision of ESS.
This uncertainty triggers a necessity in depth check of what VAT rate should be applied on the supply in question. Taxable persons should perform an in-depth validity check when it comes to this.
| Example of taxable ESS in Bangladesh ↓ |
| Supply of digital products, such as software, connected changes, and updates of the software |
| Services that can be downloaded through the internet and saved on computer and/or mobile devices |
| Supply of music, films, and games, including games of chance and gambling games Services that are ordered online but delivered in a physical location (e.g., short-term accommodation, rental of transport services). For example, the services are supplied through the online digital platforms set up by the foreign entity and used at a physical location in Bangladesh. |
| Supply of distance learning |
| Access or download of music to a physical device |
| Access or downloading of images, jingles, films, ringtones, and other audio output |
Invoicing Rules
In most cases the issuance of paper-based invoices is enough, when it comes to accounting rules for the mandatory issuance of supporting documents. There are cases where resident taxable persons are obliged to follow the e-invoicing rules.
According to Bangladesh VAT rules, non-resident providers of digital services are free of this obligation. They can issue a tax invoice, tax receipt, or simplified invoice for B2C supplies.
Invoice Requirements in Bangladesh
The invoice should at least contain the following:
General information
- Date of invoice issuance
- Unique invoice number and series
Seller information
- Company name
- Full address(head office)
- Billing address if different from company address
- VAT number
Customer information
- Name
- Full address
- VAT number(if applicable)
Fiscal Information
- Description and breakdown of the goods or services – quantity, discounts, unit price, excl. VAT
- VAT amount
- Invoice Total
Foreign Currency Invoice in Bangladesh
In most cases, the invoice should be issued in national currency. When it’s permitted to be issued in foreign currency, the VAT, total, and price of goods/services must be in local currency.
Reporting is done in local currency.
VAT Return in Bangladesh
Standard Return
Resident taxable persons and foreign taxable persons with establishments in Bangladesh are obliged to base their reporting duties every month. The monthly return should be submitted, and the owed tax should be paid by the 25th day of the following month.
VAT Bangladesh Return
| VAT Return Name | Standard Return |
| Filling frequency | Monthly |
| Online Filling | Mandatory |
| Annual Return | No |
| Filing deadline | 15th following the reporting period |
| Payment deadline | Before submission of the return |
| Payment currency | BDT |
| Language | Bangla or English |
| Local VAT acronym | VAT or Turnover Tax or Supplementary Duty |
Penalties for late reporting and omitted declarations
If a taxable person makes a late payment, late registration, or erroneous declaration, different types of penalties could be assessed against the non-compliant taxable person.
Fines and penalties according to VAT Bangladesh:
Penalties for late registration – Late registration often bears a penalty of BDT 10,000.
Penalties for late payment and fillings – The penalty for late filing or payment of owed tax is often BDT 5,000
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