 |
| "VAT deposit for the current tax period" |
How does vat deposit for the current tax period?
For registered businesses in Bangladesh, depositing VAT for the current tax period is a crucial compliance requirement.
The process generally involves calculating the net VAT payable, preparing the VAT return, and then making the payment by the designated deadline.
Here's a breakdown of how VAT deposit applies for the current tax period:
1.Determine the Tax Period: The standard tax period for VAT in Bangladesh is one calendar month. For example, the VAT due for the month of April will be for the tax period of April.
2.Calculate Net VAT Payable: For the current tax period, a business needs to calculate its net VAT liability. This involves:
Output Tax: The VAT a business collects from its sales of goods or services during a given tax period.
- Input Tax: The VAT a business pays on its purchases of goods or services (inputs) within that same tax period.
- Net VAT Payable: The net VAT payable is calculated as Output Tax - Input Tax.
- If Output Tax > Input Tax, the business has a net VAT payable amount to deposit.
- If Input Tax > Output Tax, the business might have a VAT credit, which can often be carried forward to offset future VAT liabilities or, in specific cases, be eligible for a refund.
- Adjustments: Any increasing or decreasing adjustments (e.g., due to debit/credit notes, advance tax paid at import stage, VAT deducted at source) also need to be factored into the final calculation on the VAT return form.
3.Prepare the VAT Return (Mushak 9.1): Businesses are required to fill out and submit the VAT Return Form, Mushak 9.1, for each tax period. This form details all sales, purchases, VAT collected, VAT paid, and any adjustments, leading to the final net VAT payable figure.
4.Deadline for Submission and Payment: The Mushak 9.1 VAT return, along with any VAT due for a specific tax period (like April), must be submitted by the 15th day of the following month (e.g., May 15th for April's VAT). If the 15th is a public holiday, the deadline shifts to the next business day.
5.Methods of VAT Deposit/Payment: The National Board of Revenue (NBR) in Bangladesh offers various methods for VAT payment:
- Online/e-Payment: This is the preferred and increasingly common method. Businesses can pay VAT through the NBR's VAT Online System (VOS) portal, often facilitated by integrations with commercial banks (like Sonali Bank) and mobile financial services (MFS) providers (like bKash, Rocket, UCash). This usually involves:
- Logging into the NBR's VAT Online System.
- Selecting the "VAT Payment" option.
- Inputting the BIN (Business Identification Number), tax period, and the calculated VAT amount.
- Choosing the payment gateway (bank transfer, debit/credit card, mobile banking).
- Completing the transaction and obtaining an e-challan (payment receipt).
- Manual/Bank Payment: Businesses can still deposit VAT manually at designated branches of government-authorized banks. This requires generating a payment challan (treasury challan) and depositing the amount. However, the online system is heavily promoted for efficiency.
6.Consequences of Late or Incorrect Payment:
- Penalties: Late submission of VAT returns or late payment of VAT can incur penalties.
- Interest: Interest may be charged on the overdue VAT amount.
In essence, for the current tax period, a VAT-registered business in Bangladesh must:
- Accurately calculate their net VAT liability (Output VAT - Input VAT + Adjustments).
- Prepare and submit the Mushak 9.1 VAT return.
- Deposit the calculated net VAT amount (if payable) by the 15th day of the subsequent month, preferably through the online system.
It's crucial for businesses to maintain meticulous records of all sales and purchases, along with valid VAT invoices (Mushak 6.3) to ensure accurate calculation of input and output tax and avoid any discrepancies during audits. For the latest and most detailed instructions, always refer to the official NBR website (www.nbr.gov.bd) or consult a qualified tax professional.