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| Corporate Practice bd |
What are zero-rated goods and services in Bangladesh
In Bangladesh (as of May 18, 2025), "zero-rated" supplies are taxable, but the applicable VAT rate is 0%. Businesses making these supplies are entitled to claim input tax credits. There are Zero Rated Goods & services are including-
Goods:
Export of goods:
This is the most common category. Almost exported goods from Bangladesh are treated as zero-rated goods.
Temporarily imported goods:
Goods imported temporarily that will be sent back after fulfilling their purpose can be zero-rated.
Supply of goods for export:
Goods supplied domestically with the explicit purpose of being exported are also typically zero-rated.
Services:
Export of services:
services provided for international transport encompass activities directly supporting the operation of ships and aircraft engaged in international travel.
Repair, reconstruction, maintenance, alteration work, etc. of temporarily imported goods: Services performed on goods that were temporarily imported and are intended for re-export can be zero-rated.
Supply in favor of goods with a warranty of repair or replacement: If goods are exported under warranty and returned for repair or replacement, the related services might be zero-rated.
Services rendered outside Bangladesh.
Important Considerations:
The specific list of zero-rated goods and services can be subject to changes through Statutory Regulatory Orders (SROs) issued by the National Board of Revenue (NBR).
While essential goods like some food items or children's clothing are sometimes mentioned in the context of low or zero VAT, in Bangladesh, many of these might fall under the exempted category rather than zero-rated. The key difference is that businesses dealing with zero-rated supplies can claim input tax credits, whereas those dealing with VAT-exempt supplies generally cannot.
It's always best to consult the latest official SROs and the NBR website (https://nbr.gov.bd/) for the most accurate and up-to-date list of zero-rated goods and services.
In summary, the main categories for zero-rated VAT in Bangladesh revolve around exports of goods and services, and certain services related to temporary imports and warranties. Businesses involved in these areas should ensure they understand the specific conditions and documentation required to apply the zero rate and claim input tax credits.