Tax Invoice in Bahrain

The tax invoice in Bahrain is one of the most important documents evidencing the amount of Output VAT collected and the claim on the Input VAT paid.

The Bahrain VAT Law has specified certain requirements for a tax invoice in Bahrain and these requirements must be mandatorily followed by the person issuing a tax invoice in Bahrain. Also, it is important for the customer to assess the compliance of the Tax invoice in Bahrain issued by the supplier with the Law as it is based on these tax invoices they are claiming the Input VAT from the National Bureau for Revenue (NBR)

Who Should Issue a Tax Invoice in Bahrain?

A tax invoice in Bahrain should be issued by the supplier of taxable goods or services. A tax invoice in Bahrain should be issued irrespective of the customer (that is whether the customer is registered for VAT or not, whether he is a resident or a non-resident, etc.). A tax invoice in Bahrain has to be raised even when the supplier is making a deemed supply of goods or services.

Subject to specific conditions and approval from the NBR a tax invoice in Bahrain may be issued in an electronic form or a paper form.

What if the issued Tax Invoice is lost?

In case a tax invoice in Bahrain is damaged or lost, the supplier can issue a duplicate tax invoice clearly stating that it was issued as a substitute for the original tax invoice. These substituted invoices should be indicated clearly with the “Duplicate tax invoice”.

What are the requirements of a Tax Invoice in Bahrain?

The following are the requirements that should be included in a tax invoice in Bahrain as per the Bahrain VAT Law:

1. 1. The word “TAX INVOICE” should be clearly labeled.
   2. The name, address of the supplier as given in the VAT registration certificate and also, VAT Registration Number of the supplier.
   3. The name and address of the Customer as given in their VAT registration certificate.
   4. The date of issue of the Tax Invoice and the date of supply of goods or service or date of payment, in case these differ from the date of issue.
   5. Sequential invoice number.
   6. Description of the Goods or Services supplied.
   7. Quantity of Goods supplied.
   8. The value of the goods or services provided in BHD, with the unit price exclusive of Tax in BHD.
   9. The value of the discount, if any, and the net value of the goods or service in BHD.
   10. The rate of VAT and the amount of VAT applicable in BHD.
   11. The total amount due on the supply inclusive of Tax in BHD.
   12. The exchange rate applied where a currency other than Dinar is used.
   13. In case the tax has been calculated based on the profit margin scheme, then this should be mentioned in the invoice.
   14. If the goods or service is exempt from tax, then it should be mentioned in the invoice.

What is a simplified Tax invoice in Bahrain?

A supplier may issue a simplified tax invoice without adding all the details mentioned above in either of the following situations:

1. 1. If the customer is not registered for VAT in Bahrain.

OR

1. 2. The value of the good or service supplied inclusive of the VAT amount does not exceed BHD 500.

 What are the requirements of a Simplified Tax Invoice in Bahrain?

The following are the requirements of a simplified tax invoice in Bahrain:

1. 1. The name, address, and Tax Registration Number of the Supplier as provided in the VAT registration certificate of the supplier.
   2. The date of the issue of the simplified Tax Invoice.
   3. A description of the Goods or Services supplied.
   4. The total value of the goods or services in BHD, inclusive of the VAT amount.
   5. The rate and amount of VAT applicable to the supply in BHD.

Can a bank statement be treated as a Tax Invoice in Bahrain?

A bank statement shall be treated as a tax invoice in Bahrain provided the following conditions are met:

1. 1. The name, address, and Tax Registration Number of the bank as per the VAT registration Certificate of the Bank in Bahrain.
   2. The name and address of the Customer as per the VAT registration certificate of the customer.
   3. The date of the issue of the bank statement.
   4. The VAT rate is applicable to every Supply.
   5. The amount of VAT on every Supply.

How to revise the tax invoice if the value of supply changes after issuing the tax invoice in Bahrain?

It may be appropriate to alter a tax invoice in case the value of the goods or services supplied changes after the tax invoice is issued (For e.g., damaged goods might be returned by the supplier after the issue of tax invoice). Such a situation might lead to the understatement or overstatement of VAT in the original tax invoice.

In such a case, the supplier can issue a tax credit note or a tax debit note to adjust the value of supply in accordance with the change.

A tax debt note will be issued in case the change in the value of supply would lead to an increase in the Output VAT collected. A debit note should be issued within the 15th day of the month following the month in which such adjustment was made.

A tax debit note should be issued in case the change in the value of supply would lead to a reduction in the Output VAT collected. A debit note should be issued within the 15th day of the month following the month in which such adjustment was made.

What are the requirements of the Tax Debit Note or Tax Credit Note?

The following are the requirements of a tax credit note or debit note:

1. 1. The words “Credit Note” or “Debit Note” clearly stated.
   2. The name, address and tax Registration Number of the Supplier as per the VAT registration Certificate.
   3. The name and address of the Customer, as per their VAT registration certificate (in case the customer is registered for VAT).
   4. A sequential Credit or Debit Note number.
   5. The date of the issue of the Credit or Debit Note.
   6. The number of the original Tax Invoice or original document which is subject to the adjustment.
   7. The adjusted value of the goods or service and the VAT amount to be adjusted in BHD.

How to record VAT for invoices subject to reverse charge mechanism?

If the taxable person is liable under the reverse charge mechanism to account for VAT, then he will have to disclose VAT in the invoice given to him by the supplier. The sum of VAT can be written in pen.

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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