In Bangladesh, a public and private limited company is available. Every joint venture and the company have to face. Tax compliance. As many people have no clear concept about tax compliance, they face difficulties.
This guide covers everything about tax compliance. The taxation system, procedures, and timeline of tax compliance in Bangladesh are not hard. You will have a clear concept of the general requirements of tax compliance. It is noticeable that requirements vary based on the entities and the function of entities.
Tax Identification Number (TIN) is the primary step of tax compliance. This is issued by NBR. It provides 12 digit numbers. The Tax Identification number fixes its subdivision of the private limited company. The tax Identification number is carrying the needs of every private and public limited company. For having trade identification number, one has to have
- Memorandum of Associations
- Trade License
- Articles of Associations
- Incorporation Certificate
Step 2 of Tax in Bangladesh
Tax compliance varies from time to time. First of all, all invoices of the company should be reviewed. The invoices come from the service provider, vendor, and suppliers. Thereafter, it is also carrying the need to calculate the withholding tax. Second, the withholding tax should deposit to the authority including relevant challans within a definite period. Therefore, the authority of the company should take the copies from the relevant challan. It is also too important to preserve all the copies for the imminent future and for submitting to the government authority.
Step 3 Tax Compliance in Bangladesh
Monthly Compliance Activities are too important for tax compliance. First of all, you need to prepare the withholding statement first of all. Then, arrange all relevant tax challan for submission including withholding statement. Thereafter, include treasury with the TDS statement. A copy of the monthly TDS statement should be preserved and collected. Ensure all the documents are based on the necessity of the Tax Deputy Commissioner.
Monthly Withholding (TDS) Statement Submission
The TDS statement submission is another important part of Tax compliance. Because of this, one has to prepare a monthly salary withholding statement. Tax challan should be included in the tax circle office. One has to collect the relevant tax challan. Then keep secured the receipt of monthly TDS return. Submit the explanation or documents to the deputy commissioner of taxes based on requirements.
Quarterly Compliance Activities:
This is one part of tax compliance in Bangladesh. The income tax computation and submission are a major part of tax compliance. You have to prepare the quarterly return according to the rules of the national board of revenue and investment development authority. Thereafter, submitting a financial statement is another option of tax compliance.
Semi-Annually Compliance Activities is also another part of tax compliance in Bangladesh. The steps are easy for semi-annual compliance. If you want to implement semi-annual compliance, you should know the following guidelines.
At the outset of everything, without holding tax, you have to prepare a semi-annual statement. Keep collected the relevant tax challan with the withholding tax return. Then, you have to submit these to authority. Preserve the receipt of a copy of the tax return. After these, provide an explanation and document according to the requirement of DCT. When you go to submit the annual tax, you need the following documents.
The audit statement of account is one of the crucial parts. The statements express the profit and loss of accounts. According to BAS and BFRS, the charted accounting firm audit report.
Withholding Tax Return:
Withholding tax can be deducted from the exact amount. Thereafter, you have to submit to the DCT in a prescribed manner.
Advance Tax Payment Copy:
It is another special document. The copy of payments plays the most important role at the time of paying tax in the final year.
Bank Statements: All the transactions from the bank should mention which happens in the name of the company. The documents should be submitted on the fixed date to the NBR. But if anyone fails to submit on a fixed date, he has to undergo several penalties.
Tax Compliance in Bangladesh: Assessment
A universal self-assessment procedure has similarities with the company tax assessment. The returns should be submitted under a simple procedure. The deputy commissioner of tax will take every step about tax compliance in Bangladesh. The universal self-assessment is subject to audit.
The tax liability of a company in Bangladesh depends on the status of a particular company. Income tax is also related to the operating activity of a company. Types of Company Rate of taxes on profit
- Private limited company 35%
- Publicly traded in stock exchanges 25%
- Publicly traded bank, 40%
- Insurance and non-banking institution 40
- Non-banking financial institution 42.5%
- Non- Publicly traded bank, insurance 42%
- Mobile phone operator company 45%
- Merchant Bank 37.5%
- Cigarette and Tobacco company 45%
Tax in Bangladesh 2022:
The deputy commissioner of tax assesses the gross income of the company. On the basis of this assessment, determine the payable tax. Everything is completed within thirty days. NBR is responsible for everything. Generally NBR audit and complain against any things which are out of the legal system. If the NBR takes any step against the company. The company has the chance to appeal to the appellate tribunal.
From the date of receipt, the function will be completed within 90 days. The tribunal can refer to the high court. When the judgment of the high court is different injustice, the judgment can happen according to the Appellate Division.
The Tax compliance of the Private, Public Limited companies, and Joint ventures are varied from one to another. However, Tax compliance is not hard. A taxpayer can go to a 3rd party to having a solution to their new tax compliance. The 3rd party will solve this issue in one of two ways. One can be through the use of electronic access PIN. They can be done through the use of Tax clearance certificate from the new TCS system.