Free invoice generator and tax tools for Bangladesh

A small business in Bangladesh deals with the National Board of Revenue (NBR) for three main taxes. Value added tax (VAT) is charged under the VAT and Supplementary Duty Act, 2012, with supplementary duty added on goods and services listed in its Second Schedule. Income tax on business profit comes under the Income Tax Act, 2023, and is paid in advance and by deduction at source as well as on the annual return.

Business owners who earn too little to register for VAT may instead be enlisted for turnover tax under section 63 of the VAT Act. For income tax, section 163(6) of the Income Tax Act sets a minimum tax on gross receipts: 1% in the general case, whether the business made a profit or a loss. Higher rates apply to tobacco, beverage and mobile operator businesses.

Payroll has no general state social-security scheme. The Labour Act, 2006 requires group insurance in workplaces with 100 or more permanent workers, and a 5% profit contribution to workers' funds from larger companies. The latest reform is the Finance Act, 2026 (Act 96 of 2026), which took effect on 1 July 2026 and rewrote the turnover tax and VAT return provisions.

Bangladesh's small-business regime is turnover tax under section 63 of the VAT and Supplementary Duty Act, 2012, as rewritten from 1 July 2026. A business whose turnover sits between the enlistment and VAT registration limits enlists on the eVAT system instead of registering for VAT. The Government may notify fixed turnover tax amounts by sector and region, none above Tk 2 lakh. Until it does, an enlisted person pays 4% of turnover. The tax must be paid before the return for the period is filed. An enlisted person cannot claim input tax credit or a decreasing adjustment for VAT paid on purchases, so the 4% is a final cost. Section 13 requires the enlistment certificate to be displayed where the business operates. Separately, section 163(6) of the Income Tax Act, 2023 applies a minimum income tax of 1% of gross receipts to most business income.