Tax Payer's Identification Number

Documents Required for obtaining TIN for Company in Bangladesh

• A mobile phone number
• Incorporation number of the company
• Date of incorporation of the company
• Name of Managing Director & authorized person




Individual Income Tax return filing 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.




• Who is bound to file income tax return?



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
Or
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.
Or
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,
Or
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
Or
Member of a chamber of commerce and industries or a trade
Association; or
A candidate with an office of any paurashava, city corporation,
or a Member of Parliament;
or
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.





Punishment




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 :

1. Ø Return for people leaving Bangladesh before ending a income year.(income tax return).
2. Ø Return for resident / non resident Bangladeshi (normal income tax return) except companies.Deadline is z30th November as of Assessment year 2016-17.
3. Ø VAT return for eligible assesses before 15th of each month.
4. Ø Withholding tax return for companies in 31st January and 31st July of the income year.
5. Ø Annual Information Return for NGO, company, co-operative society in 31st January and 31st July.
6. Ø Effective return for a person who has got written notice from NBR to submit return in different dates than normal return.
7. Ø Any person who has not filed a return as required normally should file a revised return.
8. Ø Every person who has net worth more than 20 lac/owns a motorcar/ has made investment in house property in city corp areas has to file a statement inducing total assets, liabilities and expenses of him; Everybody must file his/her income return within time limit to avoid any penalty imposed by government.
Corporate Tax in Bangladesh


Who is subject to Bangladesh Income Tax?

---

Ø Every company, Branch office, liaison office, representative registered in Bangladesh must file an annual tax return to National Board of Revenue (NBR).



What does a company need to file?

---

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.



How much tax will a company owes?

---

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	35%
Publicly traded Listed Company in stock exchanges	25%
Publicly traded bank, insurance and non Banking Financial institution	40%
Non- Publicly traded bank, insurance and non Banking Financial institution	42%
Merchant Bank	37.5%
Cigarette Manufacturing Company	45%
Tobacco Product Manufacturing Company	45%
Mobile operator Company	45%

Tax rate is 15% on capital gain.

Minimum Tax


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 can get benefit of reduced taxes in numerous ways. Different kinds of reduced tax benefits are given below:


1. offset taxable loss and carry forward up to six years,
2. given depreciation allowances,
3. Tax exemption given on newly established ” industrial undertakings”
4. Tax exemption given on income of “ tourist industry”
5. Tax exemption given on newly established “physical infrastructure facility”.
6. Tax exemption given those company, if those manufacturing company set up their plant in the area under “Bangladesh Export processing zone Association” (BEPZA).
7. If any Company converts it as a public limited company by transferring 20% of its paid up capital to stock exchange by Initial public offering (IPO), then those public company get 10% tax rebate for the year of IPO.
8. Income of Company’s provident fund and gratuity income are exempted , if their provident Fund and gratuity fund are approved from NBR.
9. Company get rebate on their approved Corporate Social Responsibility (CSR) Activity.



What is the time limitation for a company to file income tax return?

---

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.



Withholding 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".



Payroll Taxes

---

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.



Indirect Tax:

---

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".



Contact Us:


For a more comprehensive discussion and guideline regarding Bangladesh Tax system Please contact us.