Tax Due Date On Goods and Services Under Bahrain VAT Law

The tax due date is the date on which VAT is due on a taxable supply in Bahrain. This is an area of concern as the tax due date decides the relevant VAT return in which the value of the supply is to be disclosed and Output VAT payment is to be made to the National Bureau For Revenue (NBR) as per the Bahrain VAT Law. The tax due date also decides the time frame within which the relevant document (tax invoice or tax credit notes or tax debit notes as applicable as per the Bahrain VAT Law) is to be issued for the respective taxable supply.

What is the general rule to determine the tax due date for the supply of goods and services as per the Bahrain VAT Law?

The Bahrain VAT Law and the executive regulations have set our certain general rules to determine the tax due date on a supply. Also, there are some specific rules applicable to certain “specific” transactions.

For all the supply of goods and services (unless they are fall in the “specific” category), the following general rule is to be applied to determine the tax due date:

The tax due date will be the earlier of:

1. The date on which the goods or services are supplied.

OR

2. The date on which the payment is received for that particular supply. The VAT will be applicable only to the extent of the amount received (For e.g., advance received for the supply would be taxable on the date of such receipt).

OR

3. The date of the issue of the tax invoice for the supply.

Note*

1. In case of the supply of goods where the payment is made in installments, the general rule shall apply to determine the tax due date.

How to determine the date of the supply of goods as per the Bahrain VAT Law?

For the purpose of determining the tax due date, the date of the supply of goods will be regarded as:

1. In case the transportation of goods is organized and supervised by the supplier, the date of supply would be the date on which the transportation of the goods begins.
2. In case the supplier is not responsible for transportation, then the date of supply would be the date on which the goods are put at the disposal of the customer.
3. In case the supplier is liable for assembly and installation of the goods, the date of supply would be the date on which such assembly or installation is done.

Note**

1. When the supplier(consignor) deposits the goods with another person(consignee) to sell them, then the date of supply of such a transaction would be the date on which the consignee sells the goods to the customer.

How to determine the date of supply of services as per the Bahrain VAT Law?

For the purpose of determining the tax due date, the date of the supply of services will be regarded as the date on which the service is completed. That is for example:

• When the agreed work has been completed by the service provider.
• The service recipient receives the service and approves the receipt of the service.
• When the service recipient issues the certificate of completion

Please note***

In case the customer asks for additional service subsequently, then such additional service provided will be considered as new supply and will not affect the tax due date of the original service.

What are the specific supply and their tax due dates as per the Bahrain VAT Law?

For certain special cases, the general rules are not applied, and they follow specific tax due date rules. A few of such transactions where specific rules apply are listed below:

1. Continuous supply of goods or services (including periodic payments and consecutive invoices)

Tax due date would be the earlier of:

• Date of issue of the tax invoice (to the extent of the value invoiced).
• Due dates for payment mentioned in the tax invoice.
• Date of actual payment (to the extent of the amount paid).

In case none of the above happens within 12 months from the beginning of the supply, then the tax due date shall trigger at the end of this 12 months. Also, if none above happens in the mean-time, the tax due date shall trigger after the end of any subsequent 12 months.

Subscription to the newspaper, Electricity, and Water Bill from EWA, Monthly data packages from STC /ZAIN/BATELCO are some examples of a continuous supply.

2. Supply of goods provided for trial by the customer which may be accepted later.

Tax due date would be the earlier of:

• The date on which the customer clearly agrees to accept the goods.
• The date of the issue of the tax invoice to the customer.

3. Operating lease (wherein the lessee retains the goods for a specific time and later return the goods to the lessor)

Tax due date would be the earlier of:

• The due date of payment of each installment by the lessee under the contract.
• The actual date on which the installment is paid by the lessee.

4. Supply of goods through the vending machine (E.g., the coffee vending machine in supermarkets)

The tax due date would be the date on which the amount stored on the vending machine is collected.

5. Supply of a voucher higher than the face value of the voucher

The tax due date for the supply of such a voucher would be the date of the issue of the voucher. If this voucher is subsequently sold the date of the issue would be the date of such subsequent sale.

6. Deemed Supply

In case of deemed supply the tax due date would be:

• For those goods or services which are provided for no consideration, the tax due date would be the date on which the goods are made available to the third party or when the provision of services has been completed.
• In the case of goods that the taxable person retains upon deregistration, the tax due date shall be the effective date of deregistration.
• In case of change of use of goods, the tax due date shall be the date on which such change has occurred.

When is the tax due date for the import of goods as per the Bahrain VAT Law?

In case of import of goods, the tax due date is the date on which customs duties on these goods are due in accordance with the Bahrain Customs Law.

The VAT Law and the Executive Regulations lay down general rules for the calculation of the tax due date for the supply of goods and services and the special rules applicable to certain kinds of transactions. It is the responsibility of the taxable person to compliance with the rules and regulations.

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

We’d be happy to support you – Call us!