Welcome to Bangladesh VAT Calculator – Easily VAT Calculation
BANGLADESH VAT CALCULATOR
The Bangladesh standard VAT rate is set at 15%, applying to a wide range of goods and services across the country for Bangladesh VAT Calculator.
On January 17, the Bangladesh National Board of Revenue (NBR) announced that restaurant services would no longer be subject to a VAT increase. Originally, NBR had planned to raise VAT rates on over 40 goods and services from the reduced 5% and 7.5% rates to the standard 15% VAT rate.
This change is part of a broader effort to revise VAT rates across the country. Other goods and services that will still be impacted by the move to a 15% VAT rate include:
These updates are in line with recommendations from the International Monetary Fund (IMF), as Bangladesh seeks to renegotiate a $5 billion loan deal. The government’s goal is to address the country’s low tax-to-GDP ratio, which is one of the lowest in the world.
In Bangladesh, VAT is the primary source of revenue, contributing nearly 38% of total government revenue. Economists argue that the country’s low tax collection forces the government to rely heavily on borrowing, both domestically and internationally, which adds to economic challenges.
Bangladesh Value Added Tax (VAT) System
The VAT system in Bangladesh was introduced in 1991 as a replacement for the previous sales tax structure, aiming to modernize the taxation framework and align with international standards. Over the years, the system has evolved, with numerous updates and adjustments to improve tax compliance and efficiency.
Bangladesh’s VAT system consists of different types, designed to suit various sectors and activities. The main categories include: General VAT: Applied to most goods and services in the economy. Supplementary Duty: A form of indirect tax imposed on certain luxury or non-essential items.
Zero-rated VAT: Applies to specific goods and services that are not taxed, often to promote exports. Exempt VAT: Certain goods and services are exempt from VAT, ensuring basic necessities remain affordable.
VAT Rates in Bangladesh
In Bangladesh, the Value Added Tax (VAT) system plays a vital role in the country’s economy by ensuring that a broad range of goods and services are taxed appropriately. Understanding the VAT rates in Bangladesh is essential for businesses and consumers alike, as they navigate through different categories and tax structures. The VAT system includes several rates, including general VAT, supplementary duties, and exemptions for specific goods. In this section, we will explore the VAT rates in Bangladesh, which apply to most goods and services, forming the backbone of the country’s taxation framework.
General VAT Rates in Bangladesh
The standard VAT rate applied to most goods and services in Bangladesh is 15%. This rate covers the majority of taxable transactions.
Reduced VAT rate in Bangladesh
In Bangladesh, the reduced VAT rate typically applies to specific goods and services that are considered essential or fall under certain categories for economic reasons. As of recent updates, the reduced VAT rate:
| 1.5% | Reduced Rate – Land development |
| 2.25% | Reduced Rate – Hospital and cleaning services |
| 4.5% | Reduced Rate – Legal advisory services |
| 5% | Reduced Rate – Domestic electricity supply |
| 7.5% | Reduced Rate – Commercially rented space and machinery |
| 10% | Reduced Rate – Advertising; rented shops (above 300 square meters) |
Zero-rated VAT in Bangladesh
Zero-rated VAT is applied to specific export goods and services, meaning that these goods are subject to a 0% VAT. This is aimed at promoting exports from Bangladesh.
Exempt VAT in Bangladesh
Certain goods and services are exempt from VAT. These include essential items such as food, medicine, and public transportation. Exemption ensures that these vital products remain affordable for the general population.
Customs VAT Rates in Bangladesh
When importing goods, customs VAT is imposed. The VAT rate for imports typically aligns with the standard rate of 15%, though certain exemptions and reductions may apply depending on the product.
Supplementary Duty Rates in Bangladesh
Supplementary duties are applied to luxury and non-essential items. These rates can range from 10% to 300%, depending on the product or service.
VAT Threshold Registration and Tax Turnover in Bangladesh
In Bangladesh, VAT threshold registration is required once a business’s taxable turnover exceeds BDT 30 million. If your turnover surpasses this amount, VAT registration becomes mandatory, and businesses must comply with the applicable tax rates. However, mandatory VAT registration is also required for the supply of specified goods and services, regardless of turnover limits.
For businesses with a turnover of up to BDT 8 million, a Turnover Tax rate of 3% is applicable, and VAT is not imposed on them. Additionally, Supplementary Duty is levied at varying rates on luxury goods and specific services to curb unnecessary consumption.
To determine whether you meet the VAT threshold and calculate VAT obligations, the Bangladesh VAT calculator can provide helpful insights based on your turnover and business activities.