VAT Registration and Cancellation Procedures in Bangladesh

Who Needs to Register for VAT?

According to Section 4 of the Value Added Tax and Supplementary Duty Act, 2012, VAT registration is mandatory for the following persons in Bangladesh:

1. Turnover-Based Registration

Any person must register for VAT if:

• Their actual turnover exceeds the registration threshold within a preceding 12-month period, or

• Their projected turnover is expected to exceed the threshold in the coming 12 months.

This applies to each unit individually, whether central or branch-based.

2. Mandatory Registration Regardless of Turnover

A person must register for VAT if they:

• Manufacture goods subject to supplementary duty, or

• Supply services subject to supplementary duty in Bangladesh.

VAT Registration Cancellation

As per Section 9 of the same Act, VAT registration may be cancelled in the following ways:

1. Voluntary Cancellation

If a registered person stops business operations, they may apply to the Commissioner to cancel their VAT registration. The application must follow the prescribed process and timeline.

2. No Longer Liable for VAT

If a person still makes taxable supplies but is no longer required to be registered (e.g. turnover drops below the threshold), they may also apply for cancellation.

Note: A person who registered voluntarily (under Section 8) must remain registered for at least one year before applying for cancellation.

3. Commissioner-Initiated Cancellation

The Commissioner may:

• Cancel registration if the person qualifies under legal provisions, or

• Issue an order instructing a person to apply for cancellation based on findings.

  • If the person fails to comply, the Commissioner may cancel registration on their own (suo moto).

4. Conversion to Turnover Taxpayer

If the Commissioner finds that a cancelled registrant still meets turnover tax criteria, they may be enlisted as a turnover taxpayer, either on their own or via application.

Post-Cancellation Obligations

Once a VAT registration is cancelled, the person must:

• Stop issuing VAT-related documents such as tax invoices, credit/debit notes, or withholding certificates.

• Return the VAT registration certificate (and copies) to the Commissioner.
  

• Pay any outstanding VAT and file a final VAT return as required by law.
  

Final Thoughts

Understanding the registration and cancellation process under VAT law is critical for businesses in Bangladesh. Ensure timely action and compliance to avoid penalties. For detailed procedures and thresholds, always consult the NBR official website or a professional tax advisor.