Tax compliance in Bangladesh means filing with 4 separate authorities on 4 different rhythms. Tax deducted at source goes to the NBR (National Board of Revenue) monthly. The withholding return follows quarterly. VAT runs on its own monthly cycle. Corporate tax carries quarterly advance instalments and one annual return, and RJSC wants an annual filing of its own.
Nothing about that is unusually hard. What catches companies out is the number of moving parts, and the fact that missing one of them usually costs more than the tax itself.
The 4 authorities you file with
Start by understanding who wants what. Most compliance failures we see come from a company tracking 1 or 2 of these and forgetting the others.
| Authority | What it collects | Rhythm |
|---|---|---|
| NBR, income tax wing | Corporate income tax, tax deducted at source | Monthly deposit, quarterly withholding return, quarterly advance tax, annual return |
| NBR, VAT authority | VAT and supplementary duty | Monthly return and payment |
| RJSC | Annual return, audited accounts, changes to directors and capital | Annual, plus event-driven filings |
| Bangladesh Bank | FDI reporting for foreign-owned companies | Quarterly |
Customs duty and excise duty apply on top where you import, export or manufacture specified goods. Stamp duty under the Stamp Act 1899 attaches to instruments rather than to a filing cycle, so it appears when you execute a share transfer, a lease or a loan document.
Bangladesh has no state social security contribution for employers. What it does have is a set of employee entitlements under the Labour Act 2006, including provident fund, gratuity and the Workers’ Profit Participation Fund, which behave like payroll costs even though they aren’t taxes.
Step 1: your 2 registration numbers
Compliance starts with 2 numbers, and you can’t transact properly without either.
The e-TIN is a 12-digit Tax Identification Number issued by the National Board of Revenue. It also determines which tax circle your company reports to, which matters later when you’re responding to a notice. Registration is free and usually processes the same day. You’ll need your Trade Licence, Certificate of Incorporation, MOA and AOA.
The BIN is your 13-digit VAT registration number. It becomes compulsory once turnover passes BDT 50 lakh, and it’s compulsory from day 1 regardless of turnover if you import, export, supply against tender, or operate as the branch or liaison office of a foreign company. The thresholds and the e-VAT process are set out in VAT registration in Bangladesh.
Both sit at the end of the incorporation sequence rather than the start, in the order described in how to register a company in Bangladesh.
The compliance rhythm
Every time you pay a supplier
Review the invoice, work out whether tax has to be deducted, and at what rate. The rate depends on what you’re buying and whether the payee is an individual or a company, which is why a single default rate across the ledger is the most common error we correct. The full schedule sits in TDS rates in Bangladesh.
Collect the payee’s proof of return submission before you release the money. Without it the rate rises by 50% of itself, and recovering that from a supplier already paid in full rarely works.
Monthly
- Deposit the tax deducted during the previous month, by the 15th, using the correct challan
- File the VAT return (Mushak 9.1) and pay the net VAT liability, by the 15th
- Issue Mushak 6.3 invoices for every taxable supply as they arise
- Preserve every challan receipt, because the DCT will ask for them and reconstructing a year of them is painful
Quarterly
- File the withholding tax return, by the 25th of the month after the quarter ends
- Pay the advance income tax instalment, due 15 September, 15 December, 15 March and 15 June
- Submit Bangladesh Bank FDI reporting if the company is foreign-owned
- Hold a board meeting, which the Companies Act expects at least once a quarter
Annually
- Complete the statutory audit, which must be done before the AGM
- Hold the AGM
- File the RJSC annual return within 60 days of the AGM
- File the corporate income tax return
- File the annual information statements covering salary, interest and dividend payments
- Renew the trade licence
Every date, with penalties attached, sits in private limited company compliance and the dated schedule for the year is in the annual compliance calendar.
What goes with the annual tax return
The return is a package, not a form. Assemble these before the filing window rather than during it:
- Audited financial statements signed by an ICAB-registered firm
- Tax computation, with income classified under the applicable heads
- Depreciation schedule at NBR rates, which differ from your accounting rates
- Proof of advance tax paid, quarter by quarter
- Withholding tax returns filed during the year
- Bank statements
- Pay order for any balance payable
- Transfer pricing documentation, where related-party transactions cross the threshold
The audit is the long pole. It has to be finished before the AGM, and the AGM has to happen before the RJSC clock starts. A late audit pushes everything behind it, which is why we treat audit scheduling as a compliance decision rather than an accounting one. Our approach to that sits in audit and assurance services.
Assessment, audit and what to do when you disagree
Your return is assessed in 1 of 2 ways. Under the simplified route, assessment follows a hearing with the Deputy Commissioner of Taxes. Under the universal self-assessment route, the acknowledgement slip itself serves as the assessment order, and the return remains open to audit selection.
One trap is worth knowing: if you claim a refund in a self-assessment return, that return goes to scrutiny assessment automatically. Claiming a genuine refund is fine. Claiming one without the documentation to support it invites an examination you weren’t planning for.
The NBR selects returns for audit against published guidelines. It has 2 years from the end of the assessment year to issue an audit selection notice, and 1 year from the end of the year of selection to complete the audit. Once selected, you get the chance to file a revised return. A satisfactory response closes the audit with an acknowledgement. An unsatisfactory one leads to assessment.
If you disagree with the assessment, there are 2 tiers of appeal. The first is to the Commissioner (Appeals) against the DCT’s order. The second, if that outcome doesn’t satisfy you, is to the Appellate Tribunal. Both carry filing deadlines measured from the date of the order, so the practical advice is to decide quickly rather than thoroughly.
Incentives worth checking before you assume the standard rate
The headline corporate rate isn’t always the rate you pay. Several reliefs exist, and they’re claimed rather than granted automatically.
- Export-oriented industries attract reduced rates and VAT relief on exported goods, subject to conditions on how payment is received
- Economic zones carry tax holidays and reduced rates for qualifying businesses
- New manufacturing undertakings pay minimum tax at 0.2% of gross receipts for their first 3 income years from commercial production, rather than the usual 1%
- Information technology and several other sectors have their own concessions, which change with each Finance Act
Claiming most incentives depends on filing your return within the prescribed window. File late and the relief goes with the deadline. The rates these reliefs apply against are set out in corporate tax rates in Bangladesh.
Records, and the systems that hold them
Keep financial records for at least 5 years. That’s the practical floor given the NBR’s audit window and the VAT authority’s ability to look back over 5 financial years.
3 habits separate companies that handle an audit calmly from those that don’t:
- Reconcile monthly. Bank statements against ledgers, VAT output against sales, TDS deducted against payments made. A discrepancy found in month 2 is a correction. The same discrepancy found in month 14 is a disclosure.
- File challans as you go. Every deposit produces a receipt, and every receipt will be asked for. Scanning them monthly costs minutes; recovering them from a bank 18 months later costs weeks.
- Assign the work to a named person. Compliance that belongs to everyone belongs to nobody, and the failures we see most often follow a resignation.
Above BDT 5 crore of sales turnover, the software holding your VAT records has to be NBR-approved. Companies crossing that line mid-year find out late, and changing accounting systems partway through a year is not a small project. Ours is handled as part of outsourced accounting.
4 failures we’re called in to fix
1. Deducting at one flat rate
A single default rate across every supplier is wrong in both directions. Under-deduct and the whole expense gets disallowed. Over-deduct and you’ve handed the NBR money your supplier will want back from you.
2. Building the calendar on the old cycle
The withholding return moved to a quarterly cycle. Teams still filing on a monthly assumption are late every quarter without realising it.
3. Leaving advance tax until January
Advance tax falls due 4 times a year. Companies that discover the shortfall when preparing the annual return pay interest running from each missed instalment date, not from the filing date.
4. Treating the liaison office as exempt
No revenue does not mean no filing. A liaison office still deducts tax on salaries and vendor payments, still needs VAT registration, and still files an annual return.
Running compliance without running it yourself
We manage the full cycle for foreign-owned companies under the KAC Corporate Compliance Architecture: monthly deduction and deposit, quarterly withholding and advance tax, VAT returns, the statutory audit, and the annual filings to both NBR and RJSC.
The value isn’t in the filing. It’s in the reconciliation behind it, which is what an audit actually tests.
For a review of where your company currently stands, see tax services or talk to our team.
This guide describes the compliance framework in general terms. Rates, thresholds and filing dates change with each Finance Act. Confirm your specific position with a qualified adviser.
Frequently asked questions
What is the first step to becoming tax compliant in Bangladesh?
Obtain your e-TIN from the NBR. It’s a 12-digit number, issued free and usually the same day, and it fixes which tax circle your company reports to. You’ll need your Trade Licence, Certificate of Incorporation, MOA and AOA to apply.
How often does a company file tax returns in Bangladesh?
Tax deducted at source is deposited monthly by the 15th, with the withholding return filed quarterly by the 25th after quarter end. VAT returns are monthly. Advance income tax is paid in 4 quarterly instalments, and the corporate income tax return is annual.
What happens if the NBR selects my company’s return for audit?
You receive a selection notice, then an audit report and notice, with an opportunity to file a revised return. A satisfactory response closes the audit with an acknowledgement. The NBR has 2 years from the assessment year end to select, and 1 year from selection to conclude.
Can I appeal a tax assessment in Bangladesh?
Yes, through 2 tiers. The first appeal goes to the Commissioner (Appeals) against the Deputy Commissioner of Taxes’ order. If that outcome is unsatisfactory, the second appeal goes to the Appellate Tribunal. Both carry deadlines running from the date of the order, so act quickly.
Does a foreign-owned company face different tax compliance rules?
The filing obligations are the same, with 2 additions. Foreign-owned companies report quarterly to Bangladesh Bank on FDI, and related-party transactions above the threshold require transfer pricing documentation with the annual return. Branch and liaison offices carry their own separate requirements.
