Important VAT update from Bahrain
With less than one month to go before the VAT will be implemented in Bahrain, the MoF of Bahrain and the National Bureau for Gulf Taxation organised an informative session yesterday.
During the session more information on the Bahraini VAT rules was provided. See below an overview of the main points:
I. Registration deadlines
Three deadlines are applicable:
- 20 December 2018: businesses with turnover > BD 5 million, effective date is 1 January 2019.
- 20 June 2019: businesses with turnover > BD 500,000, effective date is 1 July 2019.
- 20 December 2019: businesses with turnover > BD 37,500, effective date is 1 January 2020.
No threshold is applicable for non-resident companies. Businesses which are not already contacted by the tax authorities have to register through a portal that will be available soon.
II. Filing VAT returns
Four options are applicable:
- Quarterly in 2019: businesses with turnover > BD 5 million.
- Semi-annual in 2019: businesses with turnover < BD 5 million.
- Monthly in 2020: businesses with turnover > BD 3 million.
- Quarterly in 2020: businesses with turnover < BD 3 million.
III. Invoice requirements
- No requirement for invoices to be in Arabic.
- Simplified invoices can be issued for supplies to non-registered customers and for supplies with an amount < BD 500.
- Bank statements will be valid as tax invoices for banks.
- The required mentions on the invoices will be similar to KSA’s rules and the potential number of the required mentions will be around 14.
IV. Real estate
- Zero rate: construction of all buildings (residential and commercial).
- Exempt: sale and lease of all buildings (residential and commercial) and bare land.
V. Financial services
- Dividends are out of scope of VAT.
- Life insurances are exempt from VAT, all other insurances are subject to VAT.
Further information is expected soon, so keep checking our daily updates for news. Please treat this update with the necessary caution as currently the Executive Regulations have not been published yet.