Value Added Tax (VAT) is a type of consumption tax imposed on goods and services in Bangladesh. The National Board of Revenue (NBR) is responsible for collecting VAT from businesses operating in the country. It’s mandatory for businesses with an annual turnover exceeding a certain threshold to obtain VAT Registration Certificate. This certificate serves as proof of VAT registration and enables businesses to comply with legal requirements and conduct transactions with other registered businesses.
Without a VAT Registration Certificate, businesses may face fines or even legal action. The process of obtaining a VAT Registration Certificate involves submitting the necessary documents to the local VAT office and completing the registration process. It’s important to ensure that all the requirements are met and the process is completed correctly to avoid any issues in the future. In this article, we will discuss the step-by-step process of obtaining a VAT Registration Certificate in Bangladesh, and provide guidance to help businesses complete the process smoothly.
Eligibility For VAT Registration
Businesses that meet the criteria for being able to register for VAT should do for it following the right procedures. One of the eligibilities is whether a company must pay VAT is determined by its yearly turnover. A business does not have to pay VAT if its yearly revenue is less than 30 lakh taka. However, if that revenue is between BDT 30 to 80 lakh, the company must pay a 3% Turnover Tax. Furthermore, companies that engage in import, export, or service provision are required to apply for VAT, regardless of their annual revenue. This includes companies that offer consulting, law, bookkeeping, or IT services, among other services.
To prevent delays in the process, companies must make sure they have all the necessary papers before filing their application to obtain VAT registration certificate. The National Board of Revenue (NBR) may request extra documentation or information during the evaluation process. The required documents may vary depending on the type of business but generally include:
- A copy of the trade license issued by the local government authority where the business is registered.
- A copy of the Tax Identification Number (TIN) certificate issued by the National Board of Revenue (NBR).
- A copy of the bank account statement of the business or the business owner to verify the business’s financial status.
- A copy of the national ID card or passport of the business owner or authorized signatory.
- Passport-size photographs of the business owner or authorized signatory.
- A copy of the rental agreement or ownership document of the business premises.
Steps to Obtain VAT Registration Certificate
Once the required documents are ready, the rest of the process is easy. The Nex steps are mentioned below chronologically:
Businesses must complete the National Board of Revenue’s supplied VAT registration application form (NBR). You should provide accurate information, matching your National Identification details, including your company name, location, contact details, business operations, and financial information.
Send all the necessary paperwork and full registration form to NBR. The municipal VAT office accepts applications both in person and online.
The NBR will review the application and may request additional information or documents if necessary. The NBR will issue a VAT registration certificate once they approve the application.
The VAT registration certificate must be prominently displayed on the business premises.
After obtaining a VAT registration certificate, the company must start collecting VAT on behalf of the government and sending it regularly to the NBR.
We can conclude that companies doing business in Bangladesh need a VAT registration certificate to abide by the legal requirements of the VAT Act 1991. Following the instructions given above thoroughly makes the process of obtaining a VAT registration certificate simple. Businesses also should keep in mind that in order to adhere to VAT regulations, they must keep accurate records of their sales and purchases. Companies can conduct legitimate different types of operations, gain access to certain opportunities, and expand the national economy by getting a VAT registration certificate.