VAT Registration &Deregistration in Bahrain

VAT Registration in Bahrain is a process through which a taxable entity requests to be registered for Value Added Tax (VAT). Upon registration, a dedicated VAT account number will be assigned to the entity. An entity has to apply for VAT Registration in Bahrain once the Turnover has exceeded the mandatory threshold limit.

A taxable person in Bahrain is obliged to charge VAT on the supplies made by him. As per the Bahrain VAT Law, a taxable person is the one who carries out an economic activity independently for the purpose of generating income and who is registered or obliged to register for VAT in accordance with the Bahrain VAT Law.

Following supplies are to be considered while arriving the VAT Registration threshold limit in Bahrain:

• Standard rated supplies
• Zero-rated supplies
• Reverse charged services received &
• Imported Goods.

However, exempted supplies should not be considered for calculating the VAT Registration threshold limit in Bahrain.

In accordance with the above let us look at whether a Non-resident supplier, supplying goods or services to Bahrain is a taxable person in Bahrain and whether he is obliged to register for VAT in Bahrain.

We shall also look at the conditions which allow a non-resident to deregister for VAT in Bahrain.

Mandatory threshold limit for VAT Registration in Bahrain as per the Bahrain VAT Law

The VAT Law applies different mandatory threshold limits for VAT Registration in Bahrain at the for residents and non-residents conducting economic activity in Bahrain.

 If the person is resident in Bahrain, the following rules apply:

Once he exceeds the mandatory registration threshold of NATIONAL BUREAU FOR REVENUE BHD 37,500:

A person resident in Bahrain who is conducting economic activity in Bahrain is required to apply for VAT registration in case:

• The amount of the annual supplies made by him during the last 12 months exceeds BHD 37,500; or
• The amount of the annual supplies he is expecting to provide for the next 12 months exceeds BHD 37,500

A person exceeding the mandatory registration threshold limit specified above must apply to the NATIONAL BUREAU FOR REVENUE for the purpose of VAT registration within 30 days starting from the last day of the month where he exceeded the mandatory threshold or within 30 days prior to the first day of the month where he expects to exceed the mandatory threshold.

If the person is a non-resident in Bahrain, the following rules apply:

As per the Bahrain VAT Law, there is no mandatory threshold that would be applied if a person is a non-resident in Bahrain. This means a non-resident supplier is required to get registered if the below conditions are met:

• He should register as soon as he starts makes a taxable supply in Bahrain and;
• If nobody else is liable to account for the VAT due on these supplies made by him under Reverse Charge Mechanism.

This means that a non-resident taxpayer is liable to get registered for VAT in Bahrain if he is making taxable supplies to businesses not registered for VAT in Bahrain or end-consumers. Since there is no threshold limit, making of a supply worth BD 1 would make him obliged for VAT Registration in Bahrain.

A non-resident should apply to NATIONAL BUREAU FOR REVENUE  for VAT Registration in Bahrain if he meets the above criteria. He must apply within 30 days of making the first supply to Bahrain.

Those businesses failing to register after meeting the above criteria’s will be liable to late registration penalties imposed by the National Bureau for Revenue.

The effective date of VAT registration is the date from when a person is allowed to charge VAT on the taxable sales made by him and this date will be confirmed by the NATIONAL BUREAU FOR REVENUE on the VAT registration certificate issued by the NATIONAL BUREAU FOR REVENUE.

VAT Deregistration in Bahrain 

If the registered Tax payer no longer meets the criteria to apply for registration then he should apply for deregistration through the NATIONAL BUREAU FOR REVENUE’s portal. However, you will remain liable for all the VAT obligations unless the NATIONAL BUREAU FOR REVENUE approves the request for VAT Deregistration in Bahrain.

A person registered for VAT in Bahrain should apply for deregistration within 30 days of any of the following events occurring:

The resident business should apply for VAT Deregistration in Bahrain in the following circumstances:

1. If you do not carry out economic activity in Bahrain any more.
2. If the total value of annual supplies made for the last 12 months is below the voluntary registration threshold of BD 18,750.
3. If the total value of annual supplies expected to be made for the next 12 months will be below the voluntary registration threshold of BD 18,750.

Also, a resident VAT payer can opt for voluntary deregistration if the total value of annual supplies made for the last 12 months is below the mandatory registration threshold of BD 37,500 or If the total value of annual supplies expected to be made for the next 12 months will be below the mandatory registration threshold of BD 37,500.

The non-Resident business should apply for VAT Deregistration in Bahrain in the following circumstances:

If they have not made taxable supplies for the last 12 months consecutively. That is, if they have not made taxable supplies to non-registered business or end-consumers and are not expecting to make taxable supplies to non-registered business or end-consumers.

However, it is important to note that the Non-resident VAT payers are not eligible for voluntary deregistration as per the Bahrain VAT Law.

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!

For TAX Service in Bahrain

Mr. Bichin
+973 3619 8998
br@emiratesca.com

For TAX Service in UAE

Mr. Navaneeth
+971 55 889 2750
nav@emiratesca.com