VAT De-Registration in Bahrain

There may be different reasons why a previously VAT Registered company in Bahrain may choose to apply for VAT De-Registration in Bahrain. These reasons are expected to fall within the VAT-related conditions set out in the Bahrain VAT Law. If the reasons are legitimate and the conditions are met, the National Bureau For Revenue (NBR) will approve the request for VAT De-Registration in Bahrain.

We know that the businesses are entitled to receive VAT Registration in Bahrain when their taxable supplies reach BHD 37,500 for the last 12 months, but when the company feels that they are no longer eligible for VAT, they need to choose to apply for VAT De-Registration in Bahrain. Below are the few of the conditions under which the companies can apply for VAT De-Registration in Bahrain as per the Bahrain VAT Law.

When To Apply for VAT De-Registration in Bahrain?

If you no longer meet the VAT Registration Requirements for VAT in Bahrain, you can apply for VAT Deregistration in Bahrain.

You will remain as a VAT registered company, liable for all VAT obligations until your application for VAT De-Registration in Bahrain is accepted by the NBR and you are informed of your effective deregistration date.

When is VAT De-Registration Mandatory in Bahrain?

If you are registered for VAT in Bahrain, you must apply for VAT Deregistration in Bahrain within 30 days if any of the following events taking place:

For Non-Resident

1. You must apply for VAT De-Registration in Bahrain when you are no longer undertaking an economic activity in Bahrain; or if you have not made taxable supplies for 12 consecutive months

For Resident

1. You must apply for VAT De-Registration in Bahrain if the total value of your annual supplies* and annual expenses** is below the volunteer registration threshold in the last 12 months; and
2. The total value of your annual supplies and annual expenses is not expected to exceed this threshold in the next 12 months

Note 1:

Annual supplies mean, the value of your taxable supplies minus capital assets: the value of your supplies of goods and services rendered in Bahrain (i.e., zero-rate or standard-rate VAT supplies), including your deemed supplies but excluding the disposal of your assets.

The value of the goods and services provided to you and for which you are responsible to account under the Reverse Charge Mechanism for VAT in Bahrain

Note 2:  Annual expenses means all the companies’ expenses which are subject to VAT in Bahrain at the rate of 5% or at the rate of 0%

Voluntary VAT De-Registration in Bahrain?

You can apply to the NBR for Voluntary VAT De-Registration in Bahrain if:

1. The value of your annual supplies over the last 12 months is below the mandatory registration threshold (BHD 37,500), but exceeds the voluntary registration threshold (BHD 18,750) along with your annual expenses;
2. The value of your expected annual supplies in the next 12 months is below the mandatory registration threshold (BHD 37,500) but meets the voluntary registration threshold (BHD 18,750) along with your annual expenses.

Can Non-resident apply for Voluntary VAT De-Registration in Bahrain?

A non-resident person may not choose to de-register for VAT on a voluntary basis.

Whether a company registered for VAT on a voluntary basis can apply for VAT De-Registration in Bahrain?

A company that has registered on a voluntary basis cannot voluntarily de-register until the company has been registered for at least 24 months.

What information is required to apply for VAT De-Registration in Bahrain?

The application for VAT De-Registration in Bahrain must include the following information, at a minimum:

1. The name of the company applying for deregistration.
2. The Registration Number of the company and the effective date of deregistration.
3. The justification for applying for de-registration.
4. Unless the reason for deregistration is the termination of his commercial activity, the date the registrant stopped producing taxable supplies.
5. The annual amount of taxable supplies during the previous twenty-four months.
6. The value of the expected Taxable Supplies for the next twelve months

All you need to know about the VAT De-Registration Procedure in Bahrain

The NBR shall process the application for VAT deregistration in Bahrain within 30 days of the date of its filing and shall inform the applicant of its decision to accept or deny the application.

• If the request for VAT deregistration in Bahrain is accepted, the Bureau shall inform the registrant of the VAT deregistration in Bahrain and shall issue such notification only after the registered company has:

1. 1. Paid the tax and fines due.
   2. Submitted all tax returns which the company was obligated to file for the periods in which the company was taxable.

• In the decision on VAT deregistration, the Bureau shall set the effective date for Tax deregistration.
• In all cases, the person who has been de-registered must conform to:

1. 1. In any case, refrain from introducing oneself as a registrant.
   2. Maintain accounts, documents, and invoices related to his supplies for a period of five years from the date of his de-registration and permit the employees of the Bureau to review them upon request.

What if you fail to de-register from VAT when required to do so?

The NBR may apply administrative penalties if you fail to de-register when required.

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!