Introduction to SME Tax Return Eligibility
In Bangladesh, small and medium enterprises (SMEs) are the backbone of the economy, representing over 90% of all businesses. Yet, many SME owners still remain uncertain about their tax obligations, especially regarding who is eligible for a tax return in Bangladesh in SME.
Filing tax returns isn’t just about compliance—it’s also a key to unlocking financial benefits and government support. In this guide, you’ll discover all the crucial points about SME eligibility for tax returns in Bangladesh, including criteria, processes, and common questions.
What is an SME in Bangladesh?
Definition by Bangladesh Bank
The Bangladesh Bank defines SMEs based on employment size, annual turnover, and asset value. These categories vary for the manufacturing, trading, and service sectors.
- Small enterprise (service/trade): Employees up to 25, assets up to BDT 50 lakh
- Medium enterprise (manufacturing): Employees up to 150, assets up to BDT 15 crore
SME Categories and Criteria
| Sector | Category | Number of Employees | Asset Value (Excluding Land & Building) |
| Manufacturing | Small | 16–50 | Up to BDT 1 crore |
| Manufacturing | Medium | 51–150 | BDT 1–15 crore |
| Service | Small | 11–25 | Up to BDT 50 lakh |
| Service | Medium | 26–50 | BDT 50 lakh–10 crore |
For more information click here : https://www.bb.org.bd/sme/smepolicye.pdf
Taxation Framework in Bangladesh for SMEs
Income Tax Ordinance and SME Provisions
The Income Tax Ordinance 1984 governs all tax matters. It includes specific rules for SMEs, particularly regarding income thresholds, presumptive tax, and allowable deductions.
Tax Identification Number (TIN) Requirement
Every SME that generates taxable income or wishes to operate legally needs a TIN certificate. Without it, they cannot file returns or claim refunds.
Who is Required to File Tax Returns?
SMEs with Annual Turnover Over BDT 50 Lakh
If your SME earns over BDT 50 lakh annually, you’re legally required to file income tax returns. You may even fall under the audit requirement depending on the sector.
Companies Registered Under RJSC
Registered entities under the Registrar of Joint Stock Companies (RJSC) are mandatorily required to submit annual returns, regardless of profit status.
Who is Eligible for Tax Refunds in SME?
Overpaid Tax Situations
Sometimes, SMEs overpay advance taxes or have excessive withholding tax deducted on payments received. In such cases, a refund can be claimed.
Withholding Tax Deductions from Payments
If an SME provides services and their clients deduct tax at source, this often creates an excess credit that becomes refundable after the year-end tax computation.
Common Deductions and Allowances for SMEs
Allowable Business Expenses
SMEs can deduct:
- Office rent
- Staff salaries and bonuses
- Utilities
- Travel for business
- Advertising and marketing
Depreciation and Investment Allowances
Eligible capital investments in machinery, equipment, and office furniture allow depreciation deductions which reduce taxable income.
How to File SME Tax Returns in Bangladesh
Step-by-Step E-Filing Process
- Register for eTIN via NBR portal
- Log in to the eReturn portal
- Fill in Form IT-11GA (for business income)
- Upload necessary documents (financials, bank statements)
- Submit and download acknowledgment receipt
Required Documents and Deadlines
Key documents:
- Trade license
- Financial statements
- Bank account summary
- Tax withheld certificates (if applicable)
Deadline: Usually November 30 every year unless extended.
Benefits of Filing SME Tax Returns
Access to Finance and Government Incentives
- SMEs with clean tax history are preferred by banks for loans
- Government grants and subsidy programs often require proof of tax filing
Legal Compliance and Credibility
- Enhances business reputation
- Supports smoother dealings with regulators and international clients
Penalties for Non-Compliance
Fines and Legal Consequences
Failing to file returns may result in:
- Fines up to BDT 10,000 or more
- Interest on unpaid taxes
- Legal notices and blacklisting
Late Filing Issues
Even if filed late, penalties accrue monthly, making timely submission crucial.
Role of Chartered Accountants and Tax Advisors
Professional help ensures:
- Accurate tax return filing
- Maximized deductions
- Risk-free audit response
It’s advisable for SMEs to consult with a certified CA or tax consultant.
Government Support and Incentives for SMEs
The National Industrial Policy and SME Foundation offer financial aid, tax rebates, and technical support for SMEs that maintain compliance.
Visit: SME Foundation Bangladesh
Case Studies: SME Tax Return Examples in Bangladesh
- Case 1: A Dhaka-based IT SME filed timely returns and secured a BDT 20 lakh bank loan based on tax records.
- Case 2: A manufacturing SME overpaid tax due to high TDS and successfully claimed a refund worth BDT 75,000.
FAQs About SME Tax Returns in Bangladesh
Q1: Is it mandatory for all SMEs to file tax returns?
Yes, especially those with revenue over BDT 50 lakh or registered under RJSC.
Q2: Can a sole proprietorship file tax returns?
Absolutely. Sole proprietors must file personal tax returns showing business income.
Q3: What if I don’t earn a profit—should I still file?
Yes, filing is required even if there is no profit or tax payable.
Q4: How long does it take to get a tax refund?
Refunds typically take 3–6 months depending on NBR processing.
Q5: Do I need an auditor for filing?
For companies with turnover above BDT 3 crore, audited financials are usually required.
Q6: Can SMEs get tax holidays?
Some sectors may qualify for industry-specific tax holidays, subject to government approval.
Conclusion: Why Every SME Should File Their Tax Return
Filing a tax return isn’t just a formality—it’s a strategic business move. From securing loans to avoiding penalties, every SME in Bangladesh benefits immensely from staying compliant. If you’re operating a small or medium enterprise, make sure you know your eligibility and take timely action to stay ahead.
