Tax for a Bangladeshi developer is not one obligation, it is a series of them attached to specific transactions: money received from a buyer, a deed registered, a payment made to a contractor, a commission paid to a broker. Each has its own head, its own rate, its own deposit deadline and its own document. The rates are reset by the annual Finance Act, so what follows is the structure — the map of which obligation attaches where — rather than a rate card. Confirm current rates with your tax adviser before applying them.
The obligations, by transaction
| Transaction | Obligation type | Who deducts or collects | What must be kept |
|---|---|---|---|
| Sale of a flat by a developer | VAT on construction service | Developer charges and deposits | Sale value, VAT charged, deposit challan |
| Deed registration | Stamp duty, registration fee, local government tax, advance income tax | Collected at the sub-registry | Deed, receipts, buyer details |
| Payment to a contractor | Tax deducted at source | Developer | Bill, deduction certificate, deposit challan |
| Payment to a consultant or supplier | Tax deducted at source, VAT deducted at source where applicable | Developer | Invoice, certificate, challan |
| Broker commission | Tax deducted at source | Developer | Commission statement, certificate |
| Salary | Tax deducted at source | Developer | Payroll register, certificates |
The structural point is that four of these six are deductions you make from someone else's money. That is the part that produces audit findings, because the liability sits with the deductor even when the underlying supplier disputes it.
What the system has to hold
An audit does not ask whether you paid. It asks you to prove it, transaction by transaction. Three records make that painless:
- A deduction against every payment. The rate applied, the head, the base amount, and the vendor's status at the time. Not a monthly total — a line per payment.
- The deposit challan linked to the deductions it covers. One challan usually covers many deductions; the link between them is what an auditor asks for and what nobody can find two years later.
- The certificate issued to the vendor, stored against the vendor and the payment.
If those three exist, a tax audit becomes a print job. If they do not, it becomes a month of work for your accounts team.
Registration-stage costs, and why buyers ask about them
At registration a buyer faces stamp duty, registration fee, local government tax and advance income tax, plus the developer's own VAT position on the sale. Buyers rarely understand the split, and a vague answer at the wrong moment stalls a registration appointment. The practical fix is a standard, written estimate sheet issued with the agreement, itemised by head, with a line saying rates are as prevailing on the date of registration. The deed registration process walks through the sequence and who submits what.
Source deductions on construction spend
The largest volume of deductions comes from contractor running bills, and the largest number of errors comes from the same place. Two controls remove most of them:
- The deduction is computed on the certified bill, not the submitted bill. If site engineering certifies BDT 42,00,000 against a claim of BDT 48,00,000, the deduction follows the certified figure. See certifying a contractor bill.
- Vendor status is a field on the vendor, not a memory. Whether a supplier is registered, and under which category, changes the rate. Storing it once and applying it automatically is the difference between a clean file and a penalty.
Where profitability meets tax
A project-wise profit figure that ignores irrecoverable tax cost is wrong in a direction that flatters you. VAT that cannot be passed on, disallowed expenses, and interest on late deposits all belong in the project cost, not in a head-office overhead pool where they disappear. Project-wise profitability covers the allocation method.
What to do next
Pick one month of contractor and consultant payments and try to produce, for each, the deduction rate applied, the challan it was deposited under, and the certificate issued. Whatever you cannot produce in ten minutes is your audit exposure — see how deductions, challans and certificates chain together.