Bahrain announces businesses with an annual turnover between the VAT registration threshold of BHD 37,500 and BHD 500,000 should be registered to VAT from 1 January 2020. Bahrain’s parliament have started VAT implementation from January 1, 2019. So third and final tranche of mandated businesses are now expected to register for VAT in Bahrain.
The VAT law is consistent with the VAT agreement. It sets out that a business established in Bahrain which performs economic activities must register for VAT if it undertakes taxable supplies or imports exceeding the mandatory registration threshold of approximately Bahrain Dinar 36,500 or US$ 100,000. The National Bureau for Revenue (NBR) has announced that the VAT registration process is now open for entities which have threshold of BHD 37,500 and BHD 500,000 annually.
Bahrain introduced 5% VAT scheme in January 2019 and the VAT Executive Regulations are also expected to be released shortly. Foreign companies, without a fixed establishment in Bahrain, must register before 1 January 2019.
Filing for all businesses who register after 1 January 2019 will be based on three tax periods, i.e. for the periods ending 30 June, 30 September and 31 December.
Businesses below the mandatory VAT registration thresholds for 2019 are not required to register in 2019. For those who wish to voluntarily register in 2019, they must exceed the voluntary registration threshold of BHD 18,750.
The NBR has approved a list of penalties that will be imposed on taxpayers for violation of the VAT laws.
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