Bahrain: VAT implementation update

5 November 2018
Bahrain News3


The Gulf Corporation Council agreed to a harmonised VAT union across its six-member states, which includes Bahrain. Bahrain, and the remaining 5-member states would implement key principles of the VAT union into their domestic VAT legislation as per the agreement.

For Bahrain, the transition towards VAT implementation shall include the following measures:

Invoices and payments made prior to 1 January 2019 for post-implementation supplies will be subject to VAT.

Initially and until an Electronic Services System transaction reporting platform has been developed, goods supplied to other member states that have also implemented VAT, such as Saudi Arabia and UAE, will be treated as exports. Thereafter, zero-rating with reverse charge supplies to eliminate import VAT shall be initiated.

Businesses/persons with turnover exceeding BHD5million need to register for VAT from 1 January 2019 via the National Bureau for Gulf Taxation. It is not clear if registration will be automatic or if documentation would need to be provided. For turnover which is below BHD5million no further information has been provided with regards to the registration dates, and further details.

94 basic food items will be zero-rated for VAT purposes which items have not been confirmed as yet.

The National Bureau for Gulf Taxation will provide further information in due course.

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