VAT Return in Bahrain

The VAT Return filed by an entity for VAT in Bahrain be subject to errors due to different reasons or may require any adjustment in any subsequent VAT Return Filing period. For example, VAT charged on sales may be overestimated or understated, input VAT paid on personal expenses may be claimed or a customer may have become insolvent and so it may be difficult to recover receivables, etc.

It may be necessary to amend or modify the VAT Return in Bahrain if any mistake occurs while filing a VAT return or an adjustment is needed to a previous file VAT return in Bahrain.

When is Modification for VAT Return in Bahrain required?

If a company discovers an error in the previously filed VAT return or find that the previously filed VAT return requires some adjustments due to an event that occurred after the VAT Return Filing in Bahrain date, then it is mandatory for the organization to notify National Bureau for Revenue (NBR)  and modify the VAT Return in Bahrain.

It is very important to understand that after 5 years from the date of VAT Return Filing in Bahrain, the claim for any tax amount wrongfully paid cannot be made.

What are the reasons to modify a VAT Return in Bahrain?

Two common reasons that could lead to a change in previously submitted VAT Return in Bahrain are:

1. Change in a business transaction: Such a situation would likely occur when at the time of filing the VAT return in Bahrain, the transaction amount was valid but after filing the return an event occurred that leads to change in the previously filed figure.

Such a situation would occur in the following cases:

1. Goods purchased during the previous VAT Return returned to the seller in the current VAT period.
2. Goods sold during the previous VAT Return returned in the current VAT period by the customers.
3. Confirmed case of Bad debt or non-payment from the Customer.
4. Any adjustment to be made to the Input VAT paid on Capital Asset.
5. An internal error: An organization may make mistakes while recording transactions. For example:
   1. Purchase invoices for a given VAT period not included.
   2. Wrong recording of taxable sales. E.g., Sales of BD 164 recorded as BD 146.
   3. A zero-rated supply treated as standard-rated for a previous VAT period.

What are the three ways to modify a VAT return in Bahrain?

There are three ways to modify a VAT Return in Bahrain. Those are:

1. Adjustment/ Apportionment.
2. Self-Amendment.

• Adjustment/Apportionment is the column between the Amount column and the VAT amount column in the VAT return.
• Correction can be found in line number 15 of the VAT return form.

When to utilize the Adjustments column to modify VAT return in Bahrain?

The adjustment column should be used when there is a change in a business transaction that was previously recorded and reported in the VAT return filed earlier. Any such change should be modified by using the Adjustment column in the VAT return.

For Example, ABC W.L.L. sold goods to DEF Co. in Quarter 1 and disclosed the Output VAT while VAT Return Filing in Bahrain. DEF Co. was declared insolvent in Quarter 3 and the amount to be recovered from DEF was declared as a Bad debt. In such a case, ABC W.L.L. can disclose the bad debt in the adjustment column and reverse the output VAT paid earlier.

It is important to note that if an adjustment is not made in the relevant VAT period, it occurs then the organization must submit a correction or self-amendment, (will be discussed in the following sections) to modify the error.

The adjustment column can be used to record the changes in both Input VAT and Output VAT.

The additional information section of the VAT Return Form in Bahrain can be utilized to provide an explanation to support the adjustments submitted in the VAT return. Also, you can upload documents that may provide added information on the adjustments.

When to modify the error through the correction column?

Correction column is used when an internal error has resulted in a change in the VAT due or refundable amount of less than BHD 5,000/- in the VAT return after the previous VAT return period.

Procedures to make correction in the VAT return:

Step 1: The VAT payer fills the VAT return form of the current VAT period in accordance with the rules and regulations of Bahrain VAT Law.

Step 2: Fill the line no. 15 “Correction from the previous VAT period” column with the corrected VAT amount calculated.

It is always recommended to fill the additional information column below the VAT return with the reason for correction and attach necessary documents supporting the same.

When to do self-amendment of VAT return in Bahrain?

Unlike modification or correction to a VAT return, Self amendments will substitute the original VAT return submitted.

Self-amendment to a VAT return in Bahrain shall also be done in the following cases:

1. Self-amendment to the original VAT return must be done in case there is an error that would result in a change of VAT due or refundable equal to or more than BHD 5000.
2. Self-amendment should be done even in case the error is detected too late that it was not modified in the VAT return following the original VAT return subject to the modification even if the effect of such error is less than BHD 5000.
3. When the company realizes an error in the VAT return filed and does not want to wait until the next return to correct the error, then the organization can opt for self-amendment even if the effect of this error would be less than BHD 5000.
4. In case the VAT payer fails to submit VAT return for a given period, then NBR issues an assessment and determines the VAT due. The VAT payer can self-amend this assessment before the assessment issued by NBR becomes final and binding.

Any VAT return under assessment from NBR cannot be amended. The VAT payer can notify NBR if any amendment is required or can wait until the assessment is completed.

Also, self-amendment could be subject to penalty.

Steps to self-amend VAT Return in Bahrain

Step 1: Log into the NBR portal and click on VAT returns. Filter the drop-down list on the right-hand-                   side and select “Billed”.

Step 2: Choose the VAT return for which self-amendment to be submitted.

Step 3: Select the amendment button on the bottom right corner of the VAT return and choose the reason to be amended from the drop-down list.

Step 4: Complete the VAT return form and submit.

Our Tax Experts in Emirates Chartered Accountants Group Bahrain believe in a proactive approach to tax advisory services with a cost-effective and tailor-made option that is preferred by businesses all over. Our team of professionals is well versed with the Bahrain VAT Law as well as the UAE VAT Law  They are also equipped with practical experience of implementing VAT in UAE and VAT in Bahrain.

Our wide range of services includes:

• VAT Registration
• VAT Training 
• VAT Implementation 
• VAT Return Filing Service
• VAT Consultancy 
• Accounting for VAT Compliance

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