Introduction
Importing a car into Bangladesh involves navigating a complex system of taxes and duties. Understanding these costs is crucial for potential importers to make informed decisions. This guide provides a detailed breakdown of the various taxes and duties applicable to car imports in Bangladesh.(garirbazar.com)
Key Components of Car Import Tax in Bangladesh
1. Customs Duty (CD)
Customs Duty is a base duty applied to the assessed value of the vehicle. The rate varies depending on the vehicle type and engine capacity. For instance, a car with an engine capacity of 1500cc may attract a customs duty of 25% .(garirbazar.com, garirbazar.com, cardekho.com.bd)
2. Supplementary Duty (SD)
Supplementary Duty is an additional charge imposed on top of the customs duty. This duty is progressive and increases with engine size. For example, vehicles with engine capacities over 4000cc may face supplementary duties up to 500% .(garirbazar.com, garirbazar.com, braverman-clb.com)
3. Value Added Tax (VAT)
A standard VAT of 15% is applied to the total value of the car after customs and supplementary duties have been calculated .(garirbazar.com)
4. Advance Income Tax (AIT)
Advance Income Tax is calculated as a percentage of the vehicle’s value. Typically, this is 5% of the CIF (Cost, Insurance, and Freight) value .(garirbazar.com, cardekho.com.bd)
5. Regulatory Duty (RD)
Regulatory Duty is a smaller duty, typically a fixed percentage, applied to the CIF value of the vehicle .(garirbazar.com)
Calculating the Total Import Cost
To illustrate, let’s consider importing a car with the following details:
- CIF Value: $11,600
- Engine Capacity: 1800cc(cardekho.com.bd)
Breakdown of Duties and Taxes:
- Customs Duty (25%): $2,900
- Supplementary Duty (150%): $21,750
- Regulatory Duty (3%): $348
- Advance Income Tax (5%): $580
- Advance Trade VAT (4%): $464
- VAT (15%): $5,532(cardekho.com.bd)
Total Import Duty: $31,574(cardekho.com.bd)
Grand Total (CIF + Duties): $43,174(cardekho.com.bd)
This example demonstrates how various duties and taxes accumulate to significantly increase the total cost of importing a vehicle into Bangladesh.(cardekho.com.bd)
Special Considerations
Electric Vehicles (EVs)
The government offers incentives for importing electric vehicles to promote environmental sustainability. As of the latest data, the import tax on electric cars is approximately 58.53%, which includes customs duty, VAT, and other fees .(internationalelectriccar.com)
Used Vehicles
Bangladesh permits the import of used vehicles under specific conditions:(Wikipedia)
- Age Limit: Vehicles must be no older than five years from the date of manufacture.
- Documentation: A Japan Automobile Appraisal Institute (JAAI) certificate is mandatory for all imported used vehicles.
- Vehicle Condition: Only right-hand drive vehicles are permitted, and they must meet Bangladesh’s safety and environmental standards .(Wikipedia, tcjcars.com)
Recent Policy Changes
In the 2024-25 fiscal budget, the government proposed ending the duty-free privilege for lawmakers on importing cars. This move aims to promote tax equity and reduce revenue concessions .(The Daily Star)
Frequently Asked Questions (FAQs) on Car Import Tax in Bangladesh
1. What is the car import tax in Bangladesh?
The car import tax in Bangladesh is a combination of several taxes and duties, including customs duty, supplementary duty, VAT, and advance income tax. These taxes significantly increase the total cost of importing a vehicle into the country.
2. How is customs duty calculated for car imports in Bangladesh?
Customs duty on car imports in Bangladesh is calculated based on the CIF (Cost, Insurance, and Freight) value of the vehicle. The duty varies depending on the engine capacity of the vehicle.
3. What is the supplementary duty for car imports in Bangladesh?
Supplementary duty is an additional tax imposed on top of customs duty. It is progressive, meaning it increases with the engine capacity of the car. For vehicles with higher engine capacities, the supplementary duty can be significantly higher.
4. How much VAT is charged on car imports in Bangladesh?
The VAT on car imports in Bangladesh is 15% of the total cost, including the customs duty and supplementary duty.
5. Are electric vehicles exempt from high import taxes in Bangladesh?
Electric vehicles (EVs) enjoy some tax incentives in Bangladesh, with the government offering reduced import duties and VAT to encourage the use of environmentally friendly vehicles.
6. What is the advance income tax (AIT) for car imports in Bangladesh?
Advance Income Tax (AIT) is a pre-payment made on the total CIF value of the vehicle. Typically, AIT is 5% of the CIF value for car imports into Bangladesh.
7. How do I calculate the total import cost for a car in Bangladesh?
To calculate the total cost of importing a car, you need to add up the CIF value, customs duty, supplementary duty, VAT, AIT, and any additional fees such as regulatory duty.
8. What is the regulatory duty (RD) for car imports in Bangladesh?
Regulatory duty is a smaller tax applied to the CIF value of a car. The rate is typically around 3%, depending on the type of vehicle.
9. Can I import a used car into Bangladesh?
Yes, used cars can be imported into Bangladesh, but they must meet certain requirements, such as being no older than five years from the date of manufacture and having right-hand drive.
10. How does the engine capacity affect car import taxes in Bangladesh?
The engine capacity directly impacts both the customs duty and supplementary duty. Cars with larger engine capacities typically attract higher taxes.
11. Are there any exemptions on car import taxes in Bangladesh?
There are limited exemptions, such as for electric vehicles, which are given preferential tax treatment. However, most vehicles are subject to the standard tax rates.
12. How can I pay the car import taxes in Bangladesh?
Car import taxes in Bangladesh can be paid at the customs office after the car arrives at the port. Payment can typically be made through bank transfers or other accepted methods.
13. What is the maximum age for importing used cars in Bangladesh?
The maximum age for importing used cars into Bangladesh is five years. Cars older than five years are not allowed for import under current regulations.
14. Is there a specific car import duty for luxury vehicles in Bangladesh?
Luxury vehicles, particularly those with high engine capacities, are subject to higher supplementary duties. Vehicles with over 4000cc engine capacity may face duties as high as 500%.
15. What are the key documents required for importing a car into Bangladesh?
You will need various documents, including a commercial invoice, bill of lading, customs declaration, proof of ownership, and in some cases, a Japan Automobile Appraisal Institute (JAAI) certificate for used vehicles.
Conclusion
Importing a car into Bangladesh involves navigating a complex system of taxes and duties. Understanding these costs is essential for making informed decisions. By considering factors such as engine capacity, vehicle type, and applicable duties, importers can better estimate the total cost of importing a vehicle into Bangladesh.(garirbazar.com)