The Bahrain Ministry of Finance (MoF) has recently announced that VAT registration will be carried out in three different phases, depending on the value of the businesses’ annual supplies. The three registration phases are as follows:

This announcement follows the MoF’s previous announcement that the first phase of VAT registration will be limited to companies with BHD 5 million annual sales.

Businesses with an annual taxable turnover exceeding the voluntary registration threshold of BHD 18,750 may register for VAT on a voluntary basis.

Further, in a recent meeting held by the MoF with tax advisors on VAT implementation, the MoF has confirmed that the VAT regulations will be issued before the end of this month. In addition, the MoF provided additional details on the following issues:

• the frequency of filing VAT returns;
• VAT groups;
• the VAT treatment of the supply of buildings, financial services, food items, oil, gas and electricity, imports and government entities;
• the content and requirements for tax invoices; and
• tax representatives and agents.

What should you do next?

Businesses should consider the VAT treatment of their transactions to ascertain whether they are required to register for VAT. While the postponement of VAT registration for some companies will give businesses additional time, businesses should consider whether they should register for VAT in order to recover VAT incurred on their procurement.

How can we help?

Al Tamimi can advise you on whether you are required to register for VAT and assist you with a VAT impact assessment or perform a second review to confirm the VAT treatment of your transactions. Please click here for our brochure on VAT implementation in Bahrain.

Please do not hesitate to contact Al Tamimi’s Tax Team if you require any assistance.

Key Contacts:

Shiraz Khan
Senior Tax Advisor
s.khan@tamimi.com

Foutoun Hajjar
Partner, Head of Office – Bahrain
f.hajjar@tamimi.com

Rad El Treki
Head of Corporate Structuring – Bahrain
r.eltreki@tamimi.com