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VAT Return Process and BIN Registration Categories for Online Business

Question

I run an online business selling products from China through Alibaba. However, after adding the 15% VAT, it has become difficult to make a profit. A friend advised me to register for both TIN (Taxpayer Identification Number) and BIN (Business Identification Number), submit monthly VAT returns, and file TIN annually.

My business has been inconsistent, running for two months and then pausing. How do I submit a zero VAT return in this situation? Also, there are several categories of BIN/VAT registrations. What category should I choose for my business? I only have a trade license under the name Money Trade International, and nothing else. Please provide your suggestions.

Answer

In your situation, here’s how you can handle VAT returns and BIN registration for your online business in Bangladesh:

  • Zero VAT Return: If your business is not generating any sales or revenue for a certain period, you can still submit a zero VAT return. This is a legal requirement to show that your business is operational but had no taxable sales in that month. To file a zero VAT return:
    • Log into the VAT e-filing portal.
    • Select the option to file your monthly return.
    • Enter “0” in the relevant fields for sales and VAT collected.
    • Submit the return on time to avoid any penalties.
    You must do this even if your business is not consistently active. Failure to file returns could lead to fines or penalties.
  • BIN Registration Category: BIN registration is essential for businesses dealing with VAT. Since you are involved in e-commerce and importing products from Alibaba, you likely fall under the category of Wholesale or Retail Trading of imported goods. To get the correct BIN registration, you should:
    • Indicate your business as an online retailer of imported goods from foreign sources, specifically under “Wholesale and Retail Trading.”
    • If your sales are primarily online, mention the e-commerce aspect in your BIN registration process to ensure the appropriate category.
  • TIN and VAT Obligations: As for the TIN, you need to submit an annual return on your overall business income. The VAT return, however, is monthly and must be filed regardless of whether you have sales or not. If your VAT-eligible sales are low or inconsistent, your monthly returns will reflect this.

To move forward:

  • Register your business for the Wholesale/Retail VAT category.
  • File monthly VAT returns, even with zero sales.
  • Consult with a tax advisor to ensure you meet all legal obligations and avoid penalties.

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