Bahrain VAT Update – Bahrain to increase the VAT rate
The Kingdom of Bahrain (Bahrain) implemented Value Added Tax (VAT) on 1 January 2019 at a standard rate of 5%. It is understood from news sources that in less than 3 years since the implementation of VAT, Bahrain plans to double its VAT rate to 10 % in a bid to boost state revenue and curb the budget deficits which was impacted by the COVID-19 pandemic.
The official text of the amended VAT Law and Regulations that covers the effective date of increase in the VAT rate and transitional rules (if any) are yet to be published by the National Bureau of Revenue (NBR).
IMPACT ON BUSINESSES
With the proposed change in the VAT rate the businesses in Bahrain are expected to focus on below key areas:
- Assessing the impact on cash flows.
- Reviewing the existing supplier and customer contracts that would straddle after the effective date of increase in the VAT rate.
- Updating ERP systems to reflect the proposed VAT rate including transitional rules (if any).
- Get compliance ready to report the correct amount of tax due to the NBR from the effective date of the increase in the VAT rate.
WHO ARE WE?
Re/think is a boutique accounting, audit, advisory, regulatory compliance, and tax advisory firm with offices in Dubai and Abu Dhabi (ADGM) 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.
HOW CAN WE HELP?
Rethink as an entity provides VAT advisory, optimization, registration, implementation, compliance, and training services in UAE, Bahrain, KSA, and the GCC.
Our team of senior qualified tax advisors, finance experts, and tax accountants are happy to provide practical help and advice, to ensure timely and cost-effective VAT services.
Based on our local and international experience, we understand that VAT is a complex tax and would certainly suffer numerous changes in the upcoming years. Rethink’s VAT services are aimed to suit both basic and complex returns for SMEs and larger enterprises.