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Vat and Tax

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Tax in Bangladesh

Taxation is a term when a taxing authority, usually a government, levies or imposes a financial obligation on its citizens or residents. A tax is a mandatory fee or financial charge levied by the government.

Under the Finance Act 2015, every individual taxpayer (including non-resident Bangladeshi), Hindu joint family, partnership firm, individual association, and artificial person created by law will be considered to be eligible to pay income tax if the income is above TK 250,000/-. But the NBR Authority published Income Tax guidelines every year where they fix the minimum income
the ceiling for that year. Tax Lawyers in Bangladesh

The following will be applicable for the tax year 2021-2022:

(1) Anyone shall be pay income tax if the taxpayer’s income is above TK. 3,00,000/-
(2) A woman and a person of 65 years of age or above shall be eligible to pay income tax if the
taxpayer’s income is above TK. 3,50,000/-
(3) If the income of the disabled taxpayer is above TK. 4,50,000/-, he will be eligible to pay
income tax.
(4) If the income limit of the Gazetted War Wounded Freedom Fighter is above TK. 4, 75,000/-,
he will be eligible to pay income tax.

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According to the Income Tax Ordinance 1984, the sources of income are as follows:

Salary

Interest on security deposit

Income from home property

Agricultural income

Income from business or profession

Capital profit

Income from other sources. However, the following income sectors will be involved in filing returns.

Part of the income of the firm

Income of spouse or minor child.

What is the minimum tax?

Under the Finance Act 2015, the tax-free income limit is generally 150,000/- (this will vary from time to time). If the tax-free income limit is exceeded, the minimum tax that the taxpayer has to pay by area is called minimum tax. The minimum tax amount is 5000/- (Dhaka Chittagong City Corporation Area), 4000/- (Other City Corporation Area), 3000/- (Area other than City Corporation) respectively.

Get advice from top Tax Lawyers in Bangladesh
Customs VAT, Tax associated legal support in Bangladesh is rapidly emerging. Rashel’s Law Desk - A Full Service Law Firm has a varied tax practice that includes advising on income tax, VAT, and customs related issues arising from the domestic and international trade, compliance requirements for individuals and domestic and international entities carrying on business in Bangladesh, including in the not for profit sector, corporate re-organization, and other related corporate work. Domestic and foreign clients regularly retain OUR FIRM to advise and represent them in all aspects of domestic and international tax. We provide comprehensive, solutions driven and seamless tax advice to clients who operate in single or multiple jurisdictions. Our tax specialist lawyers understand the importance of providing specialist tax advice blended with a comprehensive understanding of its clients’ businesses and the legal framework within which they operate. Our tax specialist lawyers have a reputation for providing pro-active advice on the full spectrum of taxes including tax advice on the following: domestic and international corporate acquisitions and disposals (including acting for private equity houses as well as management) and on funding structures to facilitate corporate acquisitions; all aspects of Bangladesh real estate acquisitions and disposals including advice on VAT (including capital goods scheme), capital gains tax and capital allowances as well as on real estate acquisition finance; all aspects of domestic and international transfer pricing VAT; all aspects of employment related taxes including advice on PAYE compliance; all aspects of employee remuneration including employee share schemes; and all aspects of tax investigations and tax litigation. Rashel’s Law Desk - A Full Service Law Firm is considered by many to be leading & specialist legal services providers with regards to specialist advisory, Custom, Excise, and VAT matters. Our lawyers can assist you in all forms of disputes in relation to Custom, Excise, and VAT matters by advising and representing you in courts and tribunals.

Tax Lawyers in Bangladesh

What is income tax registration?

Under the Income Tax Ordinance 1974, if the minimum tax-free income limit is exceeded or return is not mandatory in the case of the list mentioned in section 75 (1A), a taxpayer is required to file a return with a 12-digit TIN from a circle under any income tax commissioner under the National Revenue Board. This is called income tax registration.

Income tax certificate

The certificate was issued to the taxpayer by the cess commissioner of the concerned circle after verification, selection, and evaluation by the tax circle on the submission of the income tax return of the previous year is called an income tax certificate.

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Advance Income Tax (AIT)

Advance Income Tax (AIT) is a type of tax that is levied on goods imported for commercial purposes. This tax was introduced in 2007 to bring unregistered importers under the tax.

Tax Holiday

Tax Holiday is temporary tax reductions or exclusions. Tax leave has been given to those industrial establishments which have pledged industry and have established physical infrastructure between 1 July 2011 and 30 June 2019 by fulfilling all the conditions.

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Value Added Tax (VAT)

Value Added Tax (VAT) is a type of indirect tax levied on goods and services for value-added at every point of production or distribution cycle, starting from raw materials and going all the way to the final retail purchase. Because the consumer bears the entire tax, VAT is also a consumption tax.

VAT is levied on the taxable import and taxable supply. VAT will be levied at the rate of 15% on all imports and supplies except on goods and services. The vat rate in Bangladesh is 15%.

The procedure of value-added tax or VAT is an automatic taxing procedure based on input tax credit against supply or sale. The supplier accepted the paid-up VAT on the purchase tax of the goods or service during the purchase as credit as against the VAT included in the price during the supply of such goods or service and he pays the net amount of VAT. Therefore the seller realizes the VAT from within the price obtained from the buyer and deposits the net amount of VAT to the Government.

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The Value Added Tax was introduced in Bangladesh on 1 July 1991. 

The stander rate of VAT Rate in bangladesh is 15%. The applicable rate of VAT in case of import and supply is 15% and in case of export is 0%.

Nowadays it is very important to update your Tax and VAT file accurately. Our trained and experienced counsels can help you through the process and advise you accordingly. 

If you need help from tax lawyers in Bangladesh, please contact us.

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VAT & Tax Lawyers in Bangladesh

Customs, VAT, Tax associated legal support in Bangladesh is rapidly emerging. Rashel’s Law Desk – A Full Service Law Firm has a varied tax practice that includes advising on income tax, VAT, and customs related issues arising from the domestic and international trade, compliance requirements for individuals and domestic and international entities carrying on business in Bangladesh, including in the not for profit sector, corporate re-organization, and other related corporate work. The team consists of top Tax Lawyers in Bangladesh.

Domestic and foreign clients regularly retain OUR FIRM to advise and represent them in all aspects of domestic and international tax.  We provide comprehensive, solutions-driven, and seamless tax advice to clients who operate in single or multiple jurisdictions.  Our tax specialist lawyers understand the importance of providing specialist tax advice blended with a comprehensive understanding of its client’s businesses and the legal framework within which they operate.

Tax Lawyers in Bangladesh

Our tax specialist lawyers have a reputation for providing pro-active advice on the full spectrum of taxes including tax advice on the following:

  • domestic and international corporate acquisitions and disposals (including acting for private equity houses as well as management) and on funding structures to facilitate corporate acquisitions;

  • all aspects of Bangladesh real estate acquisitions and disposals including advice on VAT (including capital  goods scheme), capital gains tax and capital allowances as well as on real estate acquisition finance;

  • all aspects of domestic and international transfer pricing VAT;

  • all aspects of employment related taxes including advice on PAYE compliance;

  • all aspects of employee remuneration including employee share schemes; and
  • all aspects of tax investigations and tax litigation.

Rashel’s Law Desk whose team consists of top tax lawyers in Bangladesh is considered by many to be leading & specialist legal services providers with regards to specialist advisory, Custom, Excise, and VAT matters. Our tax lawyers can assist you in all forms of disputes in relation to Custom, Excise, and VAT matters by advising and representing you in courts and tribunals.  Learn more about Tax & VAT

If you any questions regarding tax & VAT, you can visit Tax office or contact us.

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