Author: SRCO Business Insights | June 5, 2024
The Value Added Tax (VAT) Act 2012 mandates the registration for a Business Identification Number (BIN) for certain businesses and individuals engaged in commercial activities. A BIN is essential for compliance with VAT regulations and is issued by the National Board of Revenue (NBR). Here’s a comprehensive guide on who needs to register for a BIN, who needs to register for turnover tax, the required documents for registration, and who is exempt from BIN registration according to the VAT Act 2012.
Who Needs to Register for a BIN?
- Businesses with Annual Turnover Exceeding BDT 3 Crore:
- Any business with an annual turnover of BDT 3 crore (30 million) or more must register for a BIN. This applies to manufacturers, importers, exporters, wholesalers, and retailers.
- Importers and Exporters:
- All importers and exporters, regardless of their turnover, are required to register for a BIN. This ensures that all goods entering or leaving the country are accounted for and comply with VAT regulations.
- Manufacturers:
- Entities involved in manufacturing goods, irrespective of the scale of operations, must register for a BIN to track the production and movement of goods within the supply chain.
- Service Providers:
- Businesses providing taxable services, such as consultancy, professional services, telecommunications, and other similar services, must register for a BIN if their annual turnover meets or exceeds the prescribed threshold.
- Wholesale and Retail Businesses:
- Wholesalers and retailers dealing in taxable goods and services are required to register for a BIN if their annual turnover exceeds the threshold of BDT 3 crore.
- Business Entities Engaged in VAT Exempt Goods and Services:
- Even if a business deals in VAT-exempt goods or services, they may be required to register for a BIN if they are involved in mixed supplies (both taxable and exempt supplies) and meet the threshold for taxable supplies.
- Government and Non-Governmental Organizations (NGOs):
- Certain government bodies and NGOs involved in commercial activities that generate taxable turnover are required to obtain a BIN.
- E-commerce and Online Businesses:
- Online businesses and e-commerce platforms dealing with taxable goods and services must register for a BIN, ensuring that digital transactions are adequately tracked and taxed.
Who Needs to Register for Turnover Tax?
- Businesses with Annual Turnover Between BDT 50 Lakh and BDT 3 Crore:
- Businesses whose annual turnover is between BDT 50 lakh (5 million) and BDT 3 crore (30 million) are required to register for turnover tax instead of VAT. This category typically includes small and medium-sized enterprises (SMEs).
Required Documents for BIN Registration
The typical documents required for BIN registration include:
- Trade License:
- Proof of business registration.
- TIN Certificate:
- Taxpayer Identification Number certificate.
- National ID Card or Passport:
- Proof of identity for the business owner or authorized representative.
- Bank Account Details:
- Bank account information for the business.
- Proof of Address:
- Utility bill or rental agreement showing the business address.
- Company Incorporation Certificate (if applicable):
- For incorporated businesses.
How to Register for a BIN or Turnover Tax
The process for registering for a BIN or turnover tax is straightforward and can be completed online through the NBR’s VAT Online System. Here are the steps:
- Visit the NBR VAT Online System:
- Create an Account:
- If you are a new user, create an account by providing the necessary details such as your name, business name, and contact information.
- Complete the Registration Form:
- Fill out the online registration form with accurate business details, including your business type, annual turnover, and nature of goods or services provided.
- Specify whether you are registering for a BIN or turnover tax based on your annual turnover.
- Submit Required Documents:
- Upload the required documents.
- Review and Submit:
- Review all the provided information to ensure its accuracy and completeness. Submit the application form online.
- Receive BIN or Turnover Tax Certificate:
- Upon successful verification, the NBR will issue your BIN or turnover tax certificate, which you can download from the VAT Online System portal.
Who is Not Required to Register for a BIN?
- Businesses with Annual Turnover Below BDT 50 Lakh:
- Businesses whose annual turnover is less than BDT 50 lakh (5 million) are not required to register for a BIN. These small businesses are generally not subject to VAT.
- Non-VATable Activities:
- Entities involved in activities that are entirely exempt from VAT under the VAT Act 2012 are not required to register for a BIN. This includes certain educational, healthcare, and agricultural activities as specified by the law.
- Casual Traders and Small-Scale Service Providers:
- Casual traders and small-scale service providers with minimal taxable supplies may be exempt from registering for a BIN.
- Government and Statutory Bodies:
- Certain government and statutory bodies may be exempt from BIN registration if their activities do not fall under the taxable category as defined by the VAT Act 2012.
Importance of Registration
Registering for a BIN or turnover tax is crucial for businesses as it:
- Ensures compliance with VAT laws.
- Allows businesses to claim VAT refunds and input tax credits.
- Enhances the credibility and legitimacy of the business.
- Avoids penalties and legal consequences associated with non-compliance.
Conclusion
Understanding who is required to register for a BIN or turnover tax under the VAT Act 2012 is essential for businesses operating in Bangladesh. Compliance not only helps in maintaining smooth operations but also builds a transparent and trustworthy business environment. By following the guidelines and registering promptly, businesses can benefit from the structured VAT system and contribute to the national economy.
For more detailed information and assistance, businesses are encouraged to visit the NBR website or consult with VAT consultant professionals.
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