Tax rate by region Bangladesh

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Navigating SaaS VAT in Bangladesh: A Comprehensive Guide

SaaS businesses in Bangladesh must comply with the country’s Value Added Tax (VAT) regulations. Implemented in 1991, the VAT system plays a significant role in generating revenue and modernizing the tax structure in the country. The standard VAT rate applicable to SaaS and other digital services is 15%, with no reduced rates or exemptions for specific categories. Businesses must file VAT returns monthly by the 15th of the subsequent month. Additionally, it’s mandatory to maintain records of all transactions for a minimum of 5 years.

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Bangladesh

Bangladesh adopted a VAT system in 1991, aiming to enhance revenue generation and modernize its tax structure.

Official government link: National Board of Revenue

15.00%

E-products and services VAT/Sales tax rate

0.00%

Reduced tax rate

Reduced tax rate product categories

No specific reduced tax rate for digital goods and services

Exempted product categories

No digital goods or services categories are exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

from the first B2B sale

Online registration possible

Yes

Local representative needed

Yes

List of digital and electronic services liable for tax

Downloadable software, streaming services, e-books, online courses, and other electronically supplied services.

Penalties

Penalties may apply for late registration and filing, including fines and interest on overdue VAT amounts.

Registration threshold

No threshold

Filing interval

Monthly

Filing deadline

By the 15th of the month following the reporting period.

E-invoicing requirements

Not specified

Record keeping

Businesses must maintain records of all transactions (invoices, receipts, etc.) for a minimum of 5 years.

How-To Guides: Bangladesh SaaS VAT

Step: 1 Threshold

Effective July 1, 2019, Bangladesh requires non-resident vendors of digital services to consumers (B2C)in Bangladesh to register for and collect VAT, regardless of the sales amount.

Step: 2 Business Registration

Registration is handled by the National Board of Revenue (NBR). Non-resident businesses must appoint a Local VAT Agent (resident in Bangladesh) to manage compliance and legal obligations.

Step: 3 TIN/VAT Number

The authority issues a Business Identification Number (BIN), which serves as the VAT registration number. This is obtained via the VAT Online Portal.

Step: 1 Standard VAT Rate

In Bangladesh, the standard VAT rate is 15%.

Step: 2 VAT Formula

To calculate the tax amount, consider the following formula:

Tax Value = Net Price X 15.00%

Step: 3 Reverse Charge (B2B)

The Reverse Charge Mechanism (RCM) applies to B2B cross-border services. When selling to a VAT-registered business in Bangladesh, the responsibility to pay VAT shifts to the buyer. The seller is not required to collect VAT if the buyer provides a valid BIN.

Step: 1 Selling B2C

The non-resident seller (via their local agent) must collect 15% VAT at the point of sale. Pricing should be displayed inclusive of VAT or clearly indicate the tax addition.

Step: 2 Selling B2B

Tax is not collected by the seller. The local business customer accounts for the VAT via the reverse charge on their own VAT return. You must verify and record the buyer’s BIN.

Step: 3 Invoice Requirements

Invoices must include:
• Supplier Name and Address
• Supplier BIN (of the local agent)
• Buyer Name and BIN (for B2B)
• Sequential Invoice Number
• Date of Issue
• Description of SaaS/Service
• Total Amount and VAT Amount (in BDT or equivalent)

Step: 1 Filing Interval

Monthly.

Step: 2 Filing Deadline

By the 15th day of the month following the tax period (e.g., January’s return is due by February 15th).

Step: 3 Submission

Filed electronically through the Integrated VAT Administration System (iVAS) at www.vat.gov.bd. Payments are made via Treasury Challan or online banking portals supported by NBR.

Step: 4 Record Keeping

Records, including Mushak 6.3 invoices and purchase/sales registers, must be kept for at least 5 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Bangladesh’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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