Manama: Businesses in Bahrain whose value of supplies in the previous 12 months exceeded BHD 37,500 or whose value of supplies in the next 12 months will exceed BHD 37,500 are mandated to obtain a VAT registration as stated by Tally Solutions - a leading international accounting and compliance software provider.
The mandatory registration threshold under VAT in Bahrain is BHD 37,500 and the VAT authorities in Bahrain have decided to introduce the Vat registration in a phased manner and registration due dates are also been worked out on this basis.
The phased manner of registration mandates the larger business to register first and remaining business later. The larger businesses with the annual supplies exceeding BHD 5,000,000 were mandated to register in the first phase by 20th December,2018. In the second phase, the business the with the annual supplies value exceeding BHD 500,000 should register within 20th June,2019. In the third phase, all the remaining business whose annual supplies exceeds BHD 37,500 should register by 20th December,2019.
A non-resident person in Bahrain must also register under VAT, regardless of the value of supplies, if he/she makes supplies for which VAT is liable to be charged. The person can take registration either directly or through a tax representative.
According to Tally Solutions, businesses can also voluntarily seek a VAT registration if the value of supplies or expenses in the previous 12 months exceeds BHD 18,750 or if the value of supplies or expenses in the next 12 months will exceed BHD 18,750. The voluntary registration threshold under VAT in Bahrain is BHD 18,750, which is 50 percent of the mandatory registration threshold.
The Kingdom of Bahrain implemented value-added tax (VAT) from 1st January 2019 and over 2,200 companies in the Kingdom of Bahrain have registered with National Bureau for Revenue since the implementation of Value-Added Tax (VAT).
“It is a good idea to receive a voluntary registration as the businesses can have the benefit of input tax deduction wherever applicable. The businesses can avail the facility to deduct input tax (tax paid on purchases) from the output tax (tax collected on sales) and only remit the balance tax payable to the National bureau for Revenue. In addition, the other benefits of registering under VAT includethe ability to issue a VAT invoice and the credibility that comes with a VAT registration. Businesses whose turnover exceeds BHD 18,750 but does not exceed BHD 37,500 should most certainly opt for a VAT registration,” said Mr. Vikas Panchal, Business Head- Middle East, Tally Solutions.
It is to be noted that individuals who make only zero-rated supplies can request to be exempted from registering under VAT. Some examples of zero-rated supplies are supply of newly constructed buildings, export of goods to a non-GCC VAT implementing state, etc.
“Businesses in Bahrain must evaluate the value of their supplies and check whether they are required to register under VAT. It is also critical that businesses prepare in-advance and be ‘VAT-Ready’ by ensuring that all the financial transactions are recorded, and books of accounts are
accurate and up to date. It is critical thatbusinesses explore the best VAT Software which will not only help them be VAT compliant but will also make the transit to VAT era seamless,” concluded Mr. Panchal.
Tally’s tax accounting software is accredited by Federal Tax Authority(FTA) in UAE and General Authority of Zakat and Tax (GAZT) in Saudi Arabia through a vigilant verification of requirements that ensures the software is guaranteed to simplify the VAT compliance for businesses. Over the past one year, Tally has been helping more than 50,000 businesses comply with VAT regulations in the UAE and KSA. The company is an accounting solutions provider that helps businesses achieve tax compliance, manage records and book keeping in a timely and effective manner. Trusted by nearly 2 million businesses globally, Tally Solutions includes a vast list of satisfied clients across GCC.
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