If your business or profession’s gross receipts exceed BDT 2 crore in an income year, turnover tax applies — whether you made a profit or a loss. Understanding when you actually pay it, and how much, can be confusing because the rules work differently depending on whether your business is profitable. Getting this wrong at filing time means either overpaying or missing tax you’re legally required to pay.
What Counts as Gross Receipts?
Per Section 163 of the Income Tax Act 2023, gross receipts mean “the total amount of sales of goods or services throughout the year (excluding VAT and supplementary duty); or all commissions, discounts, fees, charges, or any benefits received for providing services or facilities, including commission and discount.”
New Industrial Enterprises Get a Lower Rate
This turnover tax is the new name for what was previously called minimum tax, which applied at 0.60% once gross receipts exceeded BDT 3 crore.
How Turnover Tax Is Calculated: Profit vs. Loss
If your gross receipts exceed BDT 2 crore, you’re required to calculate turnover tax. Which amount you actually pay depends on whether you made a profit or a loss:
If you made a loss, you calculate and pay turnover tax directly on gross receipts, at the rates above.
If you made a profit, you follow two steps: first calculate the regular tax on your profit (after deducting allowable expenses), then calculate turnover tax on gross receipts. Whichever amount is higher is what you pay at the time of filing your return.
Why You Still Pay Turnover Tax Even Though Minimum Tax Was Abolished
Although minimum tax has been removed in most cases, some of its effect still remains through turnover tax. The good news is that any excess turnover tax you pay — the amount above your regular tax — can be adjusted against regular tax in future years.
But there’s a catch: if a future year also shows no profit, or regular tax still isn’t higher than turnover tax that year, the carried-forward amount can’t be adjusted that year either. And importantly, this excess is never directly refunded — it can only be adjusted against future regular tax, never paid back to you in cash.
Frequently Asked Questions
Do I owe turnover tax if my business made a loss this year?
Yes. If your gross receipts exceed BDT 2 crore and your business or profession made a loss, you calculate and pay turnover tax directly on gross receipts — you don’t get to skip it because there was no profit.
Is turnover tax the same as the old minimum tax?
It’s the new name for it, but not identical. Minimum tax previously applied at 0.60% once receipts exceeded BDT 3 crore; turnover tax now applies at 0.50% above BDT 2 crore (1% above BDT 4 crore), with a reduced 0.2% rate for new industrial enterprises in their first three years.
Which businesses are exempt from turnover tax altogether?
Commission businesses, and businesses that buy and sell gold, silver, gold ornaments, silver ornaments, gems-diamonds, or platinum, are exempt from turnover tax regardless of their receipts.
If I overpay turnover tax one year, can I get that money back?
Not as a refund. The excess amount — where turnover tax paid exceeds your regular tax — can only be carried forward and adjusted against regular tax in a future year where your regular tax is higher than your turnover tax.
How do I know whether to pay regular tax or turnover tax in a profitable year?
Calculate both: your regular tax on profit after allowable expenses, and turnover tax at 0.50% (or 1%) on gross receipts. Whichever amount is higher is what you’re required to pay at filing.
Not Sure Which Tax Applies to Your Business?
Turnover tax rules shift depending on your profit, loss, industry, and receipts threshold — getting the calculation wrong means overpaying or facing NBR scrutiny. Taxpert BD reviews your full financial picture and prepares your return by ITP, reviewed by an FCA.
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