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| Corporate Practice bd |
Who is required VAT registration in Bangladesh?
In Bangladesh, the following individuals and entities are generally required to register for Value Added Tax (VAT):
Mandatory Registration:
Businesses with an annual turnover exceeding BDT 5 million: This is a significant decrease from the previous threshold of BDT 30 million, as per recent amendments in January 2025.
Importers:
Any business involved in importing goods into Bangladesh must register for VAT, regardless of their turnover.
Exporters:
If your business exports goods, VAT registration is also a requirement.
Manufacturers:
Entities involved in the production of goods are generally subject to mandatory VAT registration.
Service Providers:
Certain service providers are required to register for VAT, and this can sometimes apply even if their turnover is below the general threshold
Businesses participating in tenders:
If your business intends to participate in government or other tenders, VAT registration (and a Business Identification Number - BIN) is usually mandatory.
Foreign entities:
All foreign entities conducting business through branch offices, liaison offices, or projects in Bangladesh are required to obtain VAT registration.
E-commerce platforms:
These are also generally required to register for VAT
Large service providers:
This includes sectors like telecommunications and banking
Turnover Tax (for smaller businesses):
Businesses with an annual turnover between BDT 3 million and BDT 5 million must obtain an Enlistment Certificate and pay a 4% turnover tax on their earnings. They are not subject to the standard Value Added Tax regulations.
Businesses with an annual turnover below the mandatory threshold (BDT 5 million) can choose to register for VAT voluntarily. This can be beneficial for claiming input tax credits on their purchases.
In summary, the key factors determining the need for VAT registration are the annual turnover of the business and the nature of its activities (import, export, manufacturing, specific services). The threshold for mandatory registration has been significantly lowered recently, bringing more businesses under the VAT net
It's always a good idea to consult with the National Board of Revenue (NBR) or a tax advisor in Bangladesh for the most up-to-date and specific advice based on your business circumstances. You can find more information on the NBR website (https://nbr.gov.bd/) or the VAT online services portal (https://vat.gov.bd/).