VAT Return in Bahrain

The Bahrain VAT Law has introduced Simplified VAT Return form which can be chosen by small enterprises if the following conditions are met:

1. Annual revenue is less than BD 100,000.
2. The enterprise is not a part of any tax group.

Now let us look at how to choose the simplified VAT Return form in Bahrain and what are the relevant items to be filled in the simplified VAT Return form.

How to choose the simplified VAT Return form as per the Bahrain VAT Law?

All the VAT payer in Bahrain will have to fill the full VAT Return form by default. In case they are eligible to choose simplified VAT Return form (If all of the above conditions are met) they have to submit an application online through the portal  by following the below steps:

Step 1: Access the login page at the NBR and login using the user ID and password of the VAT payer.

Step 2: At the homepage, click on “VAT payer service request” icon.

Step 3: At the “VAT payer service request” page choose “Create New service” and select the down arrow from the pop up to find the list of services provided by the NBR.

Step 4: Choose “Change VAT Return form Type” from the drop-down list of services provided by the NBR.

Step 5: You will be directed to a form to be filled and submitted.

In case you are not eligible to apply for Simplified VAT Return form, a pop-up message will notify you about the same when you are trying to fill in the above form.

After successful submission of the request to choose the simplified VAT Return form, the National Bureau for Revenue (NBR) will update you through a notification to your registered email ID or phone number the acceptance of the application. The same can also be confirmed through a letter titled “Successful application to use the simplified VAT Return form” in the My documents at the NBR portal.

Once you get the above notification all your unfiled VAT Return will be switched on to simplified VAT return. However, the previously filed full return form will remain the same and can be displayed and amended using the full return form itself.

What are the requirements of the simplified VAT Return filing process as per the Bahrain VAT Law?

Proceed to the normal VAT Return Filing page at the NBR portal and choose the unfiled VAT Return and access the VAT Return form after agreeing to the instructions provided. In the VAT Return form you will have to fill in the following details:

1. Standard Rated Sales: The total amount of standard-rated goods and services sold during the current VAT period should be disclosed in this column. Also, there is no specific column for adjustments, unlike the full VAT return. Therefore, the amount disclosed here should be net off any adjustments to be made to the previous returns.

The VAT amount would be automatically displayed in the VAT amount column. If the VAT amount does not match with the books of accounts, then the VAT payer will have to look into and revise the calculations.

2. Zero Rated Sales: In this column, the VAT payer should disclose the total amount of all goods and services supplied in the Kingdom of Bahrain that is subject to zero-rate as per the Bahrain VAT Law. Also, any exports made during the relevant VAT period should be disclosed in this field.

As said earlier there is no column for adjustments and therefore the VAT payer should report the amount net off any adjustments to be made to the previous filings.

3. Other and Exempt Sales: The following sales made should be recorded here:
   1. The sales made to a domestic purchaser who has the right to apply the domestic reverse charge mechanism on the goods and services should be reported in this column.
   2. All the sales that are exempt in accordance with the Bahrain VAT Law should be disclosed in this field.

4. Total purchases: All the purchases made by the VAT payer during the current VAT payer should be included in this column. This includes all the standard rated purchases, Import purchases, Import purchases accounted through reverse charge mechanism, purchases from unregistered dealers, zero-rated purchases and exempt purchases made during the current VAT period.

In the VAT column of the purchase field the VAT payer should manually enter the VAT amount paid against the standard rated purchases made by him eligible to be claimed as Input VAT from NBR

Also, it is important to note that there is no specific column for entering the apportionment for purchases. For e.g, if the VAT payer has purchased for BD 2000 and paid a VAT amount of BD 100 out of which he is eligible to claim only BD 80 then, the VAT payer has to disclose BD 2000 in the purchase column and under the VAT column, he can claim in BD 80. No separate disclosure of apportioned value is required.

5. Corrections: Similar to the full VAT Return form, the corrections column can be used for recording any omissions or internal error occurred in the previous VAT period.

The VAT payers can switch on to full return form whenever they want to and vice versa. However, there should be a gap of one year between the previous change.

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!