Based on NBR's VAT and Supplementary Duty Act rate schedule. Last checked September 2026, see Methodology & Sources.
The standard 15% rate and reduced rates
The standard VAT rate across Bangladesh is 15%, applied to most goods and services (including E-Passport and NID fees). Under the VAT and Supplementary Duty Act 2012, NBR also specifies truncated (reduced) rates for essential sectors: such as statutory 5% VAT on Electricity Bills, 5% VAT on Gold Jewelry, and 5% to 10% on restaurants and local trade.
When a business needs a BIN
Not every business charges VAT. Businesses whose annual turnover exceeds NBR's VAT registration threshold must register for a BIN (Business Identification Number) and issue VAT invoices (known as Mushak challans) on their sales. Smaller businesses below that threshold but above a lower turnover-tax threshold instead pay a simpler flat turnover tax, without needing to itemise VAT on every sale. Under the Finance Act 2026, BIN or enlistment registration is now tied to more everyday business touchpoints too, including opening a business bank account, renewing a trade licence, or registering a mobile financial service merchant account, so more small businesses are being pulled into the formal VAT net than before.
Worked example: adding and removing VAT
Say a shop sells a jacket for ৳2,300, and that price already includes the standard 15% VAT. To find the base price before VAT, divide by 1.15: ৳2,300 ÷ 1.15 = ৳2,000. The VAT portion is the difference, ৳300. Going the other way, if the shop's listed pre-VAT price is ৳2,000 and you need to add 15% VAT for the customer's final bill, multiply by 0.15 to get ৳300 VAT, for a total of ৳2,300. Both directions of this calculation come up constantly for retailers preparing invoices and for shoppers checking whether a price already includes tax.
Filing VAT returns & Commercial Invoicing
VAT-registered and enlisted businesses file returns in Mushak-9.1 (for those claiming input tax credit) or Mushak-9.1.1 (for traders and others not claiming credit). When issuing printed Mushak 6.3 commercial tax invoices or depositing VAT via treasury A-Challans, convert your total payable amount into formal Bengali and English words using our Amount to Words Tool (কথায় রূপান্তর). For corporate and individual year-end tax returns, use our Salary & Income Tax Calculator, and for import/export invoicing and foreign currency conversions, check live mid-rates on our Currency & Remittance Calculator.
FAQ
- How do I add VAT to a price?
- VAT amount = Price × rate. Total price = Price + VAT amount. For example, ৳1,000 at 15% VAT adds ৳150, for a total of ৳1,150.
- How do I find VAT already included in a price?
- Base price = Total ÷ (1 + rate). VAT amount = Total − Base price. For example, ৳1,150 including 15% VAT has a base price of ৳1,000 and ৳150 VAT.
- Which VAT rate should I use?
- It depends on the goods or service category under NBR's Mushak schedule. 15% is standard; many small businesses, restaurants and specific services use 5%, 7.5% or 10%. Check your Mushak-6.3 registration or ask your accountant if unsure.
- What is a BIN and do I need one?
- A BIN (Business Identification Number) is NBR's VAT registration number. You need one once your business turnover exceeds the VAT registration threshold, below that, a simpler turnover tax may apply instead.
- Is VAT the same as income tax?
- No, VAT is a consumption tax charged on goods and services at the point of sale, while income tax is charged on your earnings. See the Income Tax Calculator for the latter.
- How often do VAT-registered businesses file returns?
- Quarterly is now the default under the Finance Act 2026, due by the 15th day after the quarter ends, though monthly filing is still available as an option.
- Is this VAT calculator free?
- Yes, completely free, with no account or sign-up needed to use it.