Value Added Tax (VAT) is a key indirect tax in Bangladesh, contributing significantly to government revenue. Administered by the National Board of Revenue (NBR) under the Value Added Tax and Supplementary Duty Act, 2012 (with amendments up to 2025), VAT registration is essential for businesses engaged in taxable supplies. As of 2026, the process is fully digitized through the VAT Online Portal (vat.gov.bd), making it more efficient and transparent.
This step-by-step guide covers VAT registration in Bangladesh, helping businesses ensure compliance and avoid penalties.
What Is VAT in Bangladesh
VAT, or Value Added Tax, is a consumption tax levied on the value added to goods and services at each stage of production, distribution, and supply. The standard VAT rate is 15%, with reduced rates (e.g., 5%, 7.5%, 10%), zero-rates, or exemptions for certain items. Businesses collect VAT on sales (output VAT) and reclaim VAT paid on purchases (input VAT), remitting the net amount to the government.
Introduced in 1991 and modernized under the 2012 Act, VAT ensures fair taxation while allowing input credit to prevent double taxation.
Who Must Register for VAT
VAT registration is mandatory for:
- Businesses with annual taxable turnover exceeding BDT 30 million (3 crore).
- Manufacturers, importers, exporters, and certain service providers (e.g., telecom, banking, digital services) regardless of turnover.
- Foreign/non-resident entities supplying taxable goods/services in Bangladesh (must appoint a local VAT agent).
- Entities participating in government tenders, large contracts, or formal banking/import-export activities.
Voluntary registration is allowed below the threshold to claim input VAT credits.
VAT Thresholds and Eligibility Criteria
- Mandatory Registration Threshold: Annual taxable turnover > BDT 30 million.
- Turnover Tax Regime: For turnover between BDT 30-50 lakh (optional simplified tax, but enlistment required).
- No Threshold for Certain Activities: Compulsory for trading, manufacturing, or specific services.
- Eligibility: Any individual, partnership, company, or entity conducting economic activities in Bangladesh. Registration is free and based on postal code (no geographical restrictions).
Failure to register when required attracts penalties.
Documents Required for VAT Registration
Prepare scanned copies of the following (requirements may vary by business type):
- Valid Trade License
- TIN (Tax Identification Number) Certificate
- National ID (NID)/Passport of owner/directors
- Bank Solvency Certificate or account statement
- Rent Agreement/Deed and recent utility bill (proof of premises)
- Memorandum & Articles of Association (for companies)
- Board Resolution (for corporate applicants)
- Import/Export Registration Certificate (IRC/ERC, if applicable)
- Passport-sized photos of applicant
- List of products/services, machinery, or sales centers (for manufacturers/traders)
For foreign entities: Additional VAT agent appointment documents.
Step-by-Step VAT Registration Process
- Create an Account: Visit vat.gov.bd and register for a new taxpayer account using email/mobile for OTP verification.
- Log In and Select Registration: Access the dashboard and choose BIN (Business Identification Number) Registration.
- Fill Form Mushak-2.1: Enter business details (type, address, activities, turnover estimate).
- Upload Documents: Attach all required scanned files.
- Submit Application: Review and submit electronically.
- Verification: NBR divisional office reviews; may request additional info or site visit.
- Approval and BIN Issuance: Receive e-BIN and registration certificate (Mushak-2.3) digitally.
The entire process is online—no physical submission needed unless specified.
How to Apply Online (NBR e-Registration)
The preferred method is via the VAT Online Portal (vat.gov.bd):
- Register/login at the portal.
- Navigate to “BIN Registration” section.
- Complete Mushak-2.1 form online.
- Upload documents and submit.
- Track status in real-time.
- Pay any advance VAT (if applicable) through linked banks.
This e-system reduces processing time and eliminates office visits for most cases.
Timeline for VAT Registration Approval
- Standard Processing: 3-7 working days for complete applications.
- With Verification: Up to 15-30 days if site inspection or clarifications needed.
- Urgent Cases: Faster for exporters/importers.
Apply at least 15 days before commencing taxable supplies.
VAT Certificate Issuance & What It Means
Upon approval, NBR issues an electronic VAT Registration Certificate with a unique 11-digit BIN (Business Identification Number).
The BIN signifies:
- Legal authority to charge/collect VAT.
- Eligibility for input tax credits.
- Requirement to issue Mushak-6.3 tax invoices.
- Access to tenders, banking, and import/export facilities.
Display the certificate at business premises and quote BIN on all transactions.
Common Mistakes to Avoid During Registration
- Incomplete/incorrect form details (e.g., mismatched addresses).
- Uploading poor-quality or missing documents.
- Not updating changes post-registration (e.g., address/ownership).
- Delaying application after crossing threshold.
- Ignoring compulsory categories (e.g., importers).
- Forgetting OTP activation or using invalid contact info.
Double-check entries and consult professionals for complex cases.
Post-Registration Compliance Requirements (Returns & Filing)
After registration:
- Monthly VAT Return (Mushak-9.1): File by the 15th of the following month (even if nil).
- Issue Tax Invoices: Use Mushak-6.3 for all supplies.
- Maintain Registers: Purchase (Mushak-6.1), Sales (Mushak-6.2), etc.
- Deduct VDS: Withhold VAT at source where applicable.
- Pay Net VAT: Deposit before filing return.
- Annual Audit: For large entities; regular inspections possible.
Non-compliance leads to fines, interest, or BIN suspension.
In conclusion, VAT registration is crucial for lawful operations in Bangladesh’s formal economy. Leverage the online portal for seamless compliance, and stay updated via nbr.gov.bd or vat.gov.bd. For tailored advice, engage a VAT consultant or lawyer. Timely registration supports business growth while contributing to national development!