The Bahrain Ministry of Finance or the MoF recently said that the VAT registration will be divided into three phases and launched separately, completely depending on the total value of the annual supplies of various businesses. The three registration phases are as follows:
| Annual Supplies | VAT Registration Deadline | Effective Registration Date |
| Over and above BHD 5 million | 20 Dec 2018 | 1 Jan 2019 |
| Over and above BHD 500,000 but less than BHD 5 million | 20 June 2019 | 1 July 2019 |
| Over and above BHD 37,500 but less than BHD 500,000 | 20 Dec 2019 | 1 Jan 2020 |
This announcement has come after the MoF’s earlier announcement that the VAT registration’s first phase would be restricted to companies who have at least BHD 5 million annual sales.
Businesses which have an annual taxable turnover above the voluntary registration limit of BHD 18,750 could register for VAT but on a voluntary basis.
However, at a meeting conducted by the MoF with tax advisors regarding VAT implementation recently, the MoF has given its confirmation that the VAT regulations would be issued before the end of January. The MoF also provided additional details on the issues such as:
- How frequently can be VAT returns filed;
- How are the VAT groups divided;
- What is the VAT treatment for the supply of buildings, food items, financial services, electricity, oil, gas and imports and also government entities;
- What would be the content and prerequisites for tax invoices; and lastly
- Who will be the tax representatives and agents.
Next steps
Companies should ideally consider the VAT treatment of their business transactions to establish if they are required to go for VAT registration or not. Though postponing the process of VAT registration for some firms would offer additional time to the businesses, the company should decide whether they should go for VAT registration so as to recover the VAT incurred on their procurement or not.
Need professional assistance?
If you are looking for professional VAT consultants in Bahrain who can advice you if you need to register for VAT or not and also need help for getting a VAT impact assessment done or conduct a second review to find out the VAT treatment of your business transactions, do get in touch with us.
Our team of experienced professionals at IMC will help you at every step in case you require any advice or assistance.
IMC Group