Bahrain VAT – Registration Update
The Bahrain Ministry of Finance (MoF) has recently announced additional clarifications on registration requirements for businesses in the Kingdom of Bahrain. Although, the VAT law already states mandatory and voluntary thresholds for Tax Registration with the National Bureau for Taxation (NBT), this additional clarification provides that VAT registration would be performed in a phased manner as follows:
- Phase 1. Mandatory Tax Registration for Large Enterprises. Businesses with taxable turnover exceeding BD 5m are required to be registered with NBT by the 20 December 2018 (effective registration date being 1 January 2019).
- Phase 2. Mandatory Registration for Medium Enterprises. Businesses with taxable turnover between BD 500K to BD 5m are required to be registered with NBT by the 20 June 2019 (effective registration date being 1 July 2019).
- Phase 3. Mandatory Registration for Small Enterprises. Businesses with taxable turnover between BD 37.5K to BD 500K are required to be registered with NBT by the 20 December 2019 (effective registration date being 1 January 2020).
Irrespective of the above-mentioned phases, any businesses/persons with taxable turnover exceeding BD 18,750 can register for VAT at any point on a voluntary basis.
For foreign businesses which are non-resident in Bahrain, it is crucial to note that there is no turnover threshold and they must register for VAT from the first date they start making taxable supplies in Bahrain/ are required to pay VAT in Bahrain.
The MoF will open a portal for voluntary registration within the next week. The implementing regulations will be issued soon, although no precise date was provided.
What’s next for business?
From Re/think’s VAT experience in the UAE and KSA, businesses need to start preparing for VAT implementation as soon as possible. It is advisable to assemble a ‘VAT Project Team’ which should be a combination of key internal resources and external experts to be prepared in time.
The indicative steps to be followed are:
How can we help
Re/think as an entity provides VAT advisory, optimization, registration, implementation, compliance, and training services in Bahrain, UAE, KSA and the GCC.
Our team is here to guide you through the VAT law and regulations and ensure full compliance with the law.
Our team of senior qualified tax advisors, finance experts, and tax accountants will ensure timely and cost-effective VAT services.
Based on our local and international experience we understand that VAT is a complex tax and will certainly suffer numerous changes in the upcoming years. Re/think’s VAT services are aimed to suit both basic and complex returns for SMEs and larger enterprises.
Who we are
Re/think is a boutique accounting, audit, advisory, regulatory compliance, and tax advisory firm with offices in Dubai, Abu Dhabi (ADGM) and Bahrain focused on providing businesses of varying sizes with timely, proactive, and customized business solutions from start-up and early development to the latest stages of a business lifecycle.
For further information and assistance with VAT, Customs or Excise advisory, structuring and registrations in Bahrain, UAE or KSA, please contact tax@rethink-hq.com or call us at +973 16 55 5050.
