VAT return filing is an important compliance requirement for VAT-registered businesses in Bangladesh. A registered person must properly calculate output tax, eligible input tax credit, increasing adjustments and decreasing adjustments before determining the net VAT payable for the relevant tax periods.

The VAT and Supplementary Duty Act, 2012 provides the legal framework for calculating and paying VAT and submitting VAT returns. The Finance Act, 2026 has also introduced an important change to the VAT return filing period. Under the amended section 64 of the VAT and Supplementary Duty Act, 2012, VAT returns are now generally required to be submitted after every three tax periods, effectively making the normal VAT return filing cycle quarterly.

This article explains the basic process of preparing and submitting a VAT return in Bangladesh, including the calculation of output tax, input tax, increasing adjustments, decreasing adjustments and net VAT payable.

What is a VAT Return?

A VAT return is a statement submitted by a VAT-registered person to the National Board of Revenue (NBR) containing information about the person’s taxable supplies, output tax, eligible input tax credit, adjustments, supplementary duty where applicable, and the resulting net amount payable or refundable/carry-forward amount.

The requirement to submit a VAT return is primarily governed by section 64 of the Value Added Tax and Supplementary Duty Act, 2012.

Following the amendment made by the Finance Act, 2026, a registered or enlisted person is generally required to submit the return within 15 days after the completion of three tax periods.

When Should a VAT Return Be Submitted in Bangladesh?

This is an important change introduced by the Finance Act, 2026.

Previously, the general VAT tax period was one month and VAT returns were generally submitted within 15 days after the end of the relevant tax period. However, section 64 was replaced by the Finance Act, 2026, and the normal return filing requirement was changed to a three-tax-period cycle.

Under the amended section 64(1), every registered, enlisted, registration-required or enlistment-required person must submit the return within 15 days after the completion of three tax periods.

For example, assuming the three tax periods are July, August and September:

• July 2026: First tax period
• August 2026: Second tax period
• September 2026: Third tax period
• VAT return for these three tax periods: due within 15 days after completion of September

Therefore, the normal deadline would be 15 October, subject to the specific provisions of the law and any extension granted by NBR.

For government, semi-government and autonomous organizations, banks, insurance companies, and persons or organizations submitting a zero return, the law allows submission within 20 days after completion of the three tax periods.

The amended section 64 also allows a registered or enlisted person, if they wish, to submit a return voluntarily during each tax period rather than waiting until the end of three tax periods.

Therefore, although the statutory cycle is now quarterly, a taxpayer may have the option to submit earlier where permitted by the law and applicable procedures.

Need assistance with preparing and submitting your VAT return in Bangladesh? Our professional team can assist you with accurate VAT return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Step 1: Determine the Output Tax

The first step in preparing a VAT return is to determine the output tax for the relevant tax periods.

Under section 2(20) of the VAT and Supplementary Duty Act, 2012, output tax means VAT and supplementary duty payable by a registered person on taxable supplies of goods, services or immovable property, as well as taxable imported services.

In simple terms, output VAT is the VAT charged or payable on the taxable supplies made by the business.

For example, if a business makes taxable supplies of BDT 10,000,000 and the applicable VAT rate is 15%, the output VAT would be:

Output VAT = BDT 10,000,000 × 15% = BDT 1,500,000

The actual calculation depends on the nature of the supply and the applicable VAT rate.

A business should therefore properly reconcile its sales records, tax invoices and VAT records before determining its output tax.

Step 2: Determine Eligible Input Tax

The next step is to determine the input tax that can be claimed as input tax credit.

Under section 2(19) of the VAT and Supplementary Duty Act, 2012, input tax generally means VAT paid on eligible purchases and imports used as inputs in the economic activity of the registered person.

Under section 46, a registered person is generally entitled to claim eligible input tax credit against output tax on taxable supplies, subject to the conditions and restrictions prescribed under the Act.

Examples of input tax may include VAT paid on:

• Eligible local purchases;
• Raw materials;
• Business-related services;
• Imported goods used as inputs;
• Imported taxable services; and
• Other eligible business inputs.

However, VAT paid on every purchase does not automatically qualify for input tax credit. The requirements of section 46 and the relevant VAT rules must be satisfied.

The taxpayer should therefore maintain proper tax invoices, import documents and other supporting records to substantiate the input tax claim.

Step 3: Calculate Increasing Adjustments

After determining output tax and eligible input tax, the taxpayer should identify whether there are any increasing adjustments.

Increasing adjustments increase the amount of VAT payable.

The legal basis for increasing adjustments is section 48(1) of the VAT and Supplementary Duty Act, 2012.

Depending on the circumstances, increasing adjustments may arise from matters such as:

• VAT deducted at source;
• Annual re-accounting;
• Failure to make payment through the prescribed banking channel;
• Private use of goods;
• Adjustment following registration;
• Cancellation of registration;
• Change in VAT rate;
• Interest, penalty or fine; and
• Other prescribed circumstances.

For example, if the output VAT is BDT 1,500,000 and an increasing adjustment of BDT 50,000 applies, the increasing adjustment will be added to the VAT liability.

Step 4: Calculate Decreasing Adjustments

The taxpayer should then identify any applicable decreasing adjustments.

A decreasing adjustment reduces the amount of VAT payable.

The legal basis is section 48(2) of the VAT and Supplementary Duty Act, 2012.

Examples of decreasing adjustments include:

• Adjustment of advance tax;
• VAT deducted at source from the supplier;
• Adjustments arising from annual re-accounting or audit;
• Credit note adjustments;
• Input tax adjustment relating to exports, where applicable;
• Reduction in VAT rate;
• Carry-forward of a negative amount from a previous tax period; and
• Adjustment of VAT overpaid in a previous tax period.

Where VAT has been deducted at source from a supplier, the supplier may generally claim the amount as a decreasing adjustment subject to the conditions of the law. In particular, section 50(3) requires the supplier to obtain the prescribed VAT withholding certificate before making the relevant decreasing adjustment.

Step 5: Calculate the Net VAT Payable

After calculating output tax, input tax, increasing adjustments and decreasing adjustments, the taxpayer can determine the net VAT payable.

The calculation is governed principally by section 45 of the VAT and Supplementary Duty Act, 2012.

The basic calculation can be presented as follows:

Net VAT Payable = Output Tax + Increasing Adjustments − Input Tax − Decreasing Adjustments

For example:

Therefore, the taxpayer has BDT 700,000 of net VAT payable for the relevant return period.

Step 6: Pay the Net VAT Before Submitting the Return

This is one of the most important aspects of VAT return filing in Bangladesh.

Under section 45(2) of the VAT and Supplementary Duty Act, 2012, the net tax calculated under section 45 must be paid before submission of the VAT return for that tax period.

Therefore, where the VAT calculation results in a positive amount payable, the taxpayer should first deposit the net VAT with the Government Treasury and then submit the VAT return.

The practical sequence is:

Calculate VAT → Determine net VAT payable → Pay net VAT → Enter payment details → Submit VAT return

For example, if the net VAT payable is BDT 700,000, the taxpayer should pay BDT 700,000 to the Government Treasury before submitting the return.

The payment information should then be properly reflected in the VAT return.

NBR’s VAT guidance also confirms that the net tax is to be paid before furnishing the return.

Need assistance with preparing and submitting your VAT return in Bangladesh? Our professional team can assist you with accurate VAT return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

What Happens If Input Tax Is Higher Than Output Tax?

Sometimes, a taxpayer may have more eligible input tax and decreasing adjustments than output tax and increasing adjustments.

For example:

In this example, there is no positive VAT payable. Instead, there is a negative net amount of BDT 350,000.

Under section 68 of the VAT and Supplementary Duty Act, 2012, a negative net amount may be carried forward and adjusted against VAT payable in subsequent tax periods, subject to the provisions and conditions of the law.

The current law provides for carrying the negative amount forward and adjusting it over subsequent tax periods, with provisions relating to refund of the remaining amount where applicable.

Step 7: Complete the Appropriate VAT Return Form

The taxpayer must complete the applicable VAT return form prescribed under the VAT Rules.

The NBR has introduced Mushak-9.1.1 through the 2026 amendment to the VAT Rules. The prescribed return forms contain sections for taxpayer information, return submission data, output tax, input tax, increasing adjustments, decreasing adjustments, net tax calculation, treasury payments and closing balance.

The taxpayer should use the return form applicable to its type of economic activity and as prescribed by the latest VAT Rules and NBR instructions.

The VAT return generally requires information relating to:

• Taxable supplies;
• Output VAT;
• Input VAT;
• Increasing adjustments;
• Decreasing adjustments;
• Supplementary duty, where applicable;
• Net VAT payable;
• Treasury payment details; and
• Closing balance.

Step 8: Submit the VAT Return Through eVAT

VAT returns are submitted through the NBR’s VAT online system, commonly known as the eVAT system.

The taxpayer should log in to the eVAT system and select the appropriate return period and return type.

The taxpayer should then enter or verify:

1. Sales and supply information;
2. Output VAT;
3. Purchase and input VAT information;
4. Eligible input tax credit;
5. Increasing adjustments;
6. Decreasing adjustments;
7. Net VAT payable;
8. Treasury payment information; and
9. Closing balance.

Before final submission, the taxpayer should carefully reconcile the return with its accounting records and VAT records.

Step 9: Verify the Treasury Payment

Where there is a positive net VAT payable, the taxpayer should ensure that the VAT has been deposited before submitting the return.

The taxpayer should retain the relevant Treasury payment/challan/transaction information and enter the required payment details in the return.

It is important to ensure that the amount paid agrees with the net VAT payable shown in the return.

Step 10: Submit the Return

After completing the return and verifying the payment information, the taxpayer can submit the VAT return through the eVAT system.

For online submission, the return should be carefully reviewed before final submission because errors in input tax, output tax or adjustments can affect the taxpayer’s VAT liability.

The taxpayer should retain a copy of the submitted return and all supporting documents for future reference, audit and VAT assessment purposes.

Example of a Complete VAT Calculation

Assume a business has the following figures for the relevant return period:

• Output VAT: BDT 5,000,000
• Eligible input tax: BDT 3,200,000
• Increasing adjustments: BDT 150,000
• Decreasing adjustments: BDT 250,000

The calculation will be:

Output VAT
BDT 5,000,000

Add: Increasing adjustments
BDT 150,000

Less: Input tax credit
BDT 3,200,000

Less: Decreasing adjustments
BDT 250,000

Net VAT payable = BDT 1,700,000

Therefore, the taxpayer should deposit BDT 1,700,000 to the Government Treasury before submitting the VAT return.

After making the payment, the taxpayer should enter the payment details in the return and submit it through the eVAT system within the applicable statutory deadline.

Important VAT Return Sections at a Glance

The following provisions of the VAT and Supplementary Duty Act, 2012 are particularly relevant when preparing a VAT return:

VAT Return Filing Checklist

Before submitting a VAT return, a business should ideally complete the following checklist:

• Reconcile sales with the accounting records;
• Determine taxable and exempt supplies;
• Calculate output VAT;
• Reconcile purchase records;
• Identify eligible input tax;
• Verify tax invoices and import documents;
• Calculate input tax credit under section 46;
• Identify increasing adjustments;
• Identify decreasing adjustments;
• Calculate the net VAT payable under section 45;
• Pay the net VAT before submitting the return;
• Verify Treasury payment information;
• Complete the applicable Mushak return;
• Submit the return through eVAT;
• Save the submitted return and payment evidence; and
• Preserve supporting VAT documents for future inspection or audit.

Need assistance with preparing and submitting your VAT return in Bangladesh? Our professional team can assist you with accurate VAT return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.

Conclusion

Preparing a VAT return in Bangladesh involves more than simply reporting sales and paying VAT. A taxpayer must properly determine output tax, eligible input tax credit, increasing adjustments and decreasing adjustments before arriving at the net VAT payable.

The key calculation can be summarized as:

Net VAT Payable = Output Tax + Increasing Adjustments − Input Tax − Decreasing Adjustments

Where the calculation results in a positive amount, the net VAT must be paid to the Government Treasury before the VAT return is submitted, as required under section 45(2) of the VAT and Supplementary Duty Act, 2012.

The Finance Act, 2026 has also introduced an important change to the return filing period. Under the amended section 64, the normal VAT return is now submitted within 15 days after completion of three tax periods, making the standard filing cycle quarterly. Certain government, semi-government and autonomous organizations, banks, insurance companies and zero-return filers are allowed up to 20 days.

Businesses should therefore maintain their VAT records continuously throughout the year rather than waiting until the quarterly return deadline. Proper reconciliation of sales, purchases, input VAT, output VAT and adjustments will make the VAT return preparation process more accurate and reduce the risk of errors, additional VAT liability, penalties or disputes with the tax authority.

Legal references: Value Added Tax and Supplementary Duty Act, 2012, particularly sections 2(19), 2(20), 45, 46, 48, 50, 64, 65, 66 and 68; Finance Act, 2026; and the VAT Rules, 2016 as amended from time to time.

Need assistance with preparing and submitting your VAT return in Bangladesh? Our professional team can assist you with accurate VAT return preparation and timely submission. Contact us at +880 1677 970763 (Call & WhatsApp) or email ferdous@fmgaccountants.com.