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How VAT is calculated in Bangladesh
Under the VAT and Supplementary Duty Act 2012, the standard VAT rate is 15%. Some goods and services use reduced rates such as 10%, 7.5% or 5%, and a few have specific or truncated rates. Supplementary duty (SD) applies to selected goods and is charged before VAT, so VAT is calculated on the price plus SD.
Adding VAT to a price (VAT-exclusive)
VAT = Price × Rate ÷ 100. For a price of ৳10,000 at 15%, VAT is ৳1,500 and the customer pays ৳11,500.
Removing VAT from a price (VAT-inclusive)
If the price already includes VAT, don't just take 15% off. Use VAT = Total × Rate ÷ (100 + Rate). For ৳11,500 at 15%, VAT is 11,500 × 15 ÷ 115 = ৳1,500 — that is 13.04% of the total, not 15%.
With supplementary duty (SD)
SD = Price × SD rate, then VAT = (Price + SD) × VAT rate. For ৳10,000 with 10% SD and 15% VAT: SD ৳1,000, VAT ৳1,650, total ৳12,650.
Who has to charge VAT?
- Businesses above the VAT registration threshold must hold a BIN, charge VAT and issue a Mushak-6.3 tax invoice for each sale.
- Smaller businesses below the threshold may be eligible for turnover tax instead of standard VAT.
- Monthly VAT returns (Mushak-9.1) are filed online through the NBR's VAT portal.
Thresholds and rates are revised in the national budget each year, so always confirm the current figures with NBR or your VAT consultant.