Professional Consulting & Advisory Firm (Company Law & Tax)
Tax Payer's Identification Number (Tin) for Company in Bangladesh
Individual Income tax return means submission of return of annual income in the prescribed form to the Deputy Commissioner of Taxes (DCT) of respective individual taxpayer’s circle of NBR by a person.
In some Condition, individual tax payers must obtain TIN Certificate and file the tax return to DCT. Whose total income during the respective income year exceeds the maximum limit which is not-chargeable to tax under the Income tax ordinance, 1984 or if he was assessed to tax for any one of the last three proceeding year. Or Resides within the specific limits of a city corporation or a paurashava or a divisional headquarters or district headquarters and who at any time during the relevant income year fulfills any of the following conditions:
In some Condition, individual tax payers must obtain TIN Certificate and file the tax
return to DCT. Whose total income during the respective income year exceeds the maximum
limit which is not-chargeable to tax under the Income tax ordinance, 1984 or if he was
assessed to tax for any one of the last three proceeding year. Or
Resides within the specific limits of a city corporation or a paurashava or a divisional headquarters or district headquarters and who at any time during the relevant income year fulfills any of the following conditions:
i) Owns a motor vehicle
ii) Being a member of registered club which registered under VAT Act, 1991
His or her basic salary exceeds Tk. 16,000 any time within a year in case of a Govt. Employee or corporation, or
Operating any business or profession having trade license from a city corporation, a pourashava and operates a bank account.
registered with a recognized professional body as a chartered accountant, cost and management accountant , doctor, dentist, lawyer, income tax practitioner , engineer, architect or surveyor or any other similar profession,
Member of a chamber of commerce and industries or a trade Association; or
He or she is a partner of any Partnership business.’ or
He or She is a Shareholder director of a company
Member of a chamber of commerce and industries or a trade
A candidate with an office of any paurashava, city corporation,
or a Member of Parliament;
A participate in a tender floated by the government, semi government, autonomous body or a local authority; or
Any non government organization registered with NGO Affairs bureau.
Time limit to submit the return and supporting documents
An individual must file tax return within 30th November with all related supporting documents. An individual can follow two procedure to file the return one is universal self assessment procedure and normal procedure. If anyone follows the universal self assessment procedure, they must have 12 digit Tax Identification Number (TIN). Both procedures have their own merits and demerits.
Generally, an individual tax payer file return in the form of – IT 11 GA with the description of asset and liability in form of 10BB including all supporting documents such as bank statements, salary statement, Treasury challan of TDS . If the individual has house property income then they must submit the house rent agreement, Copy of deposit slip of rent. Business individual must submit the income statement and balance sheet. For the salaried person whose only income is salary can file the return in the form of IT-11 UMA with the supporting of salary certificate, TIN, TDS documents and Bank statements. A business individual or professional individual’s income can file the return in the form of IT- 11 CHA if his or her income not more than 3 lac. If any taxpayer claims the investment rebate then he should fill up the schedule 24D and attached the copy documents with return.
An individual deemed to be guilty of an offence, if s/he, without reasonable cause fails to furnish the return of income or delay in furnishing within time. Beside this, the DCT may impose fine Tk. 10% from the last assessed amount but not less than Tk. 1000 and also impose fine Tk. 50 each day further delay. DCT may impose penalty of Tk. 5,000 if he or she was not assessed earlier. In addition, if a person fails to income tax return within 30th November they have to pay 2% interest on current assessed income, even though applying for time extension for reasonable clause.
The collection of revenue from an individual is the legal right of the government to survive and develop the county. Every individual must submit tax return and pay income tax within 30 November, if his or her income exceeds the taxable limit or the person bound to file return within the scope of Income Tax Ordinance, 1984 to escape from penalty and honor the Country law.
Tax Consultants in Bangladesh
Taxation has been and is one of the critical and complex compliance issues for business organization as well as individual tax payers in Bangladesh. The government is now more strict than previous times to collect Tax and VAT as a source of revenue. Government has been trying to impose tax in every ways possible.
If any business organization or individual tax payer fails to comply with prevailing taxation rules, they have chances to face severe pecuniary measures. That is why large and successful organizations have to comply with taxation and related laws. But sometimes they cant handle a difficult taxation scenario efficiently due to their confusion and misunderstanding the law. Both business organization and individual tax payer depends on tax consultancy firms to aid in tax compliance issues. Tax consultants are providing advice or acting as agents or principal on behalf of different business clients in order to remain compliant with rules and regulations and keep it in a favorable position In Bangladesh, Tax consultancy service providers are coming from different types of professional background such as Chartered Accountants, Cost and Management Accountants (CMA), Income Tax Practitioners (ITP), Advocate, Retired. Govt. income tax officers.
Tax consultants are providing a wide range of taxation service with due diligence and in a professional manner. They are providing different types of service to their client such as Income tax planning , Filing income tax return, withholding tax return, obtaining TIN certificate, Transfer pricing issue, Filing and obtaining permission regarding Tax Holiday and Tax assessment matter, Filing case ,acting as tax lawyer ,advocacy about taxation matter, Obtaining VAT registration , Filing Monthly VAT return and providing advice and guidance to the client regarding taxation matters. Tax consultants are very efficiently providing some of these services, specially in the case of income tax filing , annual assessment, advocacy in appellate tribunal . Now a days, Income tax planning is one of most important issue for large business organizations because of their lots of day to day transaction as well as their complex nature of business. Mode of tax planning are changing day by day due to continuous changing and adding provision in income tax and Value added tax .
Large and successful business houses want a new dimension of tax planning service such as structuring salary and perquisites, dividend issue, investment ,finance issue , purchase policy issue, transfer pricing issue tendering , tax holiday, CSR and even location of production matters to cope up and survive with new scenario and get the best benefit by complying taxation laws. Tax consultants have huge opportunity to provide service in this tax planning matter. This new field of service will add the value of their professional profile. So tax consultants should add new range of tax planning service and practice in this area to put their client the best position they deserve.
Brief Rules of Income Tax Return in Bangladesh
Bangladesh has a very specific rule about how and when will a person file his income tax accounting (i.e. return) to Government. The specific timing and nature of returns are cited as below :
Ø Every company, Branch office, liaison office, representative registered in
Bangladesh must file an annual tax return to National Board of Revenue (NBR).
Ø Annual Company tax return is provided information regarding company’s income,
expense, net profit before tax, assets and liabilities. It is also used to
determine tax liability, Tax deducted at source etc.
Ø The tax liability of a company in Bangladesh depends on the activity and legal
status of particular company. Income tax rate is varying according to company’s
types of business activity and legal status of the company. The Rate of income
tax and corresponding legal status of the are given below:
|Types of Company
|Rate of taxes on profit
|Private limited company, Non listed company. Non Resident Company
|Publicly traded Listed Company in stock exchanges
|Publicly traded bank, insurance and non Banking Financial institution
|Non- Publicly traded bank, insurance and non Banking Financial institution
|Cigarette Manufacturing Company
|Tobacco Product Manufacturing Company
|Mobile operator Company
Company must paid minimum tax @0.3% tax on their gross receipt, if their normal tax (that specified in above table) liability fall less than minimum tax.
How can Company’s taxes be reduced?
Ø A company tax payer must file their annual tax return by the 15th day of the seven month following the close of its tax year. Example: if a company accounting year end on 30 June, 2015 then last time of filling return is 15 January, 2016. A company taxpayer may get extension time period after the permission of Deputy Commissioner of taxes.
Ø A company is making payment to their suppliers, service providers, and salary to employees for different purposes. According NBR rules, a company must deduct tax on source on their payment on specific rate and deposit the same to the government exchequer. It is also known as Withholding Tax. A Company must file a withholding tax return on every six month (December & June).Withholding tax return included all payment amount which are subject to TDS and a copy of treasury challan. Details of TDS rate will be found in "www.fmcibd.com".
Ø A company must deduct tax from their employee’s salary on an average rate if their employees have taxable salary income and deposit the same in government exchequer through treasury challan with code of specific employee Zone. Company must show both TDS and salary amount into their Withholding tax return.
Ø Bangladesh government imposes value Added Tax (VAT) as indirect tax on usage of final Consumer. A company must take the VAT registration under specific code related their activity. Final Consumer must pay the VAT on specific product & services. Generally VAT rate is 15% on particular value of products and services. But there is some different rate of VAT due to truncated base Value. When a company is making payment for any VAT imposable goods and service they must deduct VAT at source (VDS) amount on particular products and service and deposit the same to the government exchequer through treasury challan. A company must file VAT return including all those VDS amount deposit in government exchequer with corresponding amount of value of product and services. Detail rate of VDS on corresponding product and Services:"www.fmcibd.com".
For a more comprehensive discussion and guideline regarding Bangladesh Tax system Please contact us.