Tax Incentives and Investment Conditions
3.6 Value added tax (VAT) (1/2)
New VAT legislation has been implemented from 1 July 2019 with a view to modernising the VAT
system, ease VAT compliance and reduce VAT complexities
Standard VAT rate
Nature of Activities
-
Businesses having turnover between BDT 5m to BDT 30m will be subject to turnover VAT
Supply of goods
Supply of any goods from inside to outside Bangladesh;
Temporarily imported goods;
Deemed export;
- Supply of goods for repair, maintenance or modification and supply of stores or spare parts for ocean-going ship and aircraft
engaged in international transport;
Supply of services
-
Services given outside of Bangladesh;
-
Services given physically on goods situated outside Bangladesh at the time of supply of the service,
-
Services given relating to temporarily imported goods under the Customs Act;
-
Supply of telecommunication services by a telco supplier to a non-resident telco supplier.
VAT Rate
15%
4%
Zero rated
Trade VAT
Specifically for
Manufacturers (on imports)
Medicine
Petroleum products
Certain prescribed goods and services
Business entities whose supplies are subject to Truncated VAT can choose to exercise the standard VAT rate of 15% and claim input
VAT credit against their purchase.
5%
3%
2.4%
2%
Lesser Rate
(2-10%)
KPMG
© 2023 Rahman Rahman Huq and KPMG Advisory Services Limited are entities registered in Bangladesh, and member firms of the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Printed in Bangladesh.
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