Value Added Tax (VAT) Services in Bangladesh

Value Added Tax (VAT) in Bangladesh is collected at each stage of supply and administered by the National Board of Revenue through VAT Commissionerates and their divisions and circles. The standard rate is 15%, with reduced rates, exemptions and supplementary duty on specified goods and services set out in the Act's schedules and in SROs. For most businesses, the real work is not the rate but the monthly paperwork that proves what was charged, paid and credited.

This page is for businesses that already hold a BIN and want reliable month-to-month VAT handling: accounts teams that are stretched, foreign-owned companies unfamiliar with Mushak forms, and growing firms that have received their first VAT notice. If you have not registered yet, start with our page on obtaining a BIN.

What ongoing VAT compliance involves

A registered business is expected to keep records that would let a VAT officer reconstruct every taxable transaction. The main obligations are:

• Issuing a Mushak 6.3 tax invoice for each taxable supply, with credit and debit notes (Mushak 6.7 and 6.8) for adjustments
• Maintaining the purchase register (Mushak 6.1) and sales register (Mushak 6.2), or the combined register where applicable
• Submitting a Mushak 4.3 input-output coefficient declaration for manufactured goods before supply
• Deducting VAT at source from suppliers where the business is a withholding entity, depositing it and issuing Mushak 6.6 certificates
• Filing the Mushak 9.1 monthly return online and paying net VAT through treasury challan or e-payment
• Keeping records for the retention period required by the Act and producing them on request

Input tax credit: where most money is lost

Input tax credit lets you offset VAT paid on purchases against VAT charged on sales. It is valuable but tightly conditioned. Credit generally requires a valid Mushak 6.3 invoice in your name and BIN, and must be claimed within the time allowed in the Act. Certain purchases are blocked from credit, and some payment conditions apply to larger transactions, including payment through banking channels.

We regularly see businesses losing credit because suppliers issued handwritten or incomplete invoices, because the claim was missed in the right tax period, or because purchases were made in cash. Reviewing supplier invoices monthly, before the return is filed, recovers most of that leakage.

VAT deduction at source (VDS)

Government bodies, banks, insurance companies, NGOs, educational institutions, limited companies and other specified entities must deduct VAT at source when paying for certain supplies. The deducting entity deposits the amount and issues a Mushak 6.6 certificate to the supplier, who uses it to adjust its own liability. Rates and the list of withholding entities are set by the Act and SROs and change with Finance Acts, so the current list should be checked each July.

Common problems include deducting at the wrong rate, deducting but depositing late, and suppliers failing to collect their Mushak 6.6 certificates, which leaves them unable to claim the adjustment.

Penalties and risks of poor VAT compliance

• Late return filing and late payment attract penalties and interest under the VAT and SD Act 2012
• Missing or defective invoices can lead to disallowance of input credit during audit
• Under-declared turnover discovered through bank statements, customs data or third-party VDS records triggers demand notices
• Repeated non-filing can lead to enforcement action, including bank account attachment in serious cases
• Weak records make it difficult to defend yourself if the VAT Intelligence directorate or the commissionerate opens an audit

Who benefits from outsourced VAT services?

Outsourcing makes sense when VAT work competes with other priorities in a small accounts team, when the business has mixed supplies at different rates, when it imports raw materials and needs to manage advance tax and credit, or when it is foreign-owned and management wants assurance in English. It is also useful during growth phases, such as opening a new branch, starting manufacturing, or winning a large corporate or government contract with VDS.

How the process works

1. VAT health checkWe review your BIN details, recent returns, invoices and registers to identify gaps and exposures.
2. Fix the set-upWe correct activity codes, invoice formats, price declarations and register layouts so that future months are clean.
3. Monthly data collectionYour team shares sales, purchase, import and VDS data by an agreed date each month.
4. Review and reconcileWe check invoices, calculate output tax, eligible input credit and adjustments, and reconcile with your accounts.
5. File Mushak 9.1We prepare and submit the return online before the 15th and share the payment amount and challan details.
6. Notices and auditsIf a VAT officer raises a query or audit, we prepare the response and supporting schedules.

Typical timeline: Initial VAT review and clean-up typically takes one to three weeks depending on the volume of records; monthly filing then runs on a fixed calendar ahead of the 15th-of-month deadline.

How Tax & VAT Associates helps

• Monthly Mushak 9.1 preparation and online submission
• Input tax credit review and supplier invoice checks
• VDS calculation, deposit and Mushak 6.6 certificate management
• Mushak 4.3 price declaration for manufacturers
• Responses to VAT notices, audits and demand letters
• Year-end VAT reconciliation with financial statements and tax return

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.