VAT Return Filing in Bahrain Complete Guide for Your Reference!

VAT in Bahrain Introduction

With the introduction of Value Added Tax (VAT) in Bahrain from 1^st January, 2019 businesses under the VAT Registration Threshold have registered for VAT in Bahrain. All the registered businesses for VAT in Bahrain has to file for their VAT Return Filing on the specific periods as prescribed by the National Bureau for Revenue (NBR) . The return filing periods can be on a quarterly basis or on a half-yearly basis as of 2019 depending on their turnover and from 2020 it will be a monthly basis or on a quarterly basis.

VAT Return Filing in Bahrain is an online process and has to be filed by logging in with your registered Tax credentials in the NBR portal 

What do you mean by VAT Return Filing?

A VAT Return is a calculation of how much VAT a business is liable to pay to the Tax Authority to or be reimbursed by them. A taxpayer has to pay VAT on the taxable purchases he has made which is also known as input tax and he also has to collect VAT on his taxable sales which is known as output tax.

To summarize what is VAT Return is that, the taxpayer collects VAT on behalf of the Tax Authority which is NBR and also claims back the VAT paid on their taxable purchases.

How to file your VAT Return in Bahrain?

VAT Return Filing in Bahrain has to be submitted through a VAT Return Form which can be accessed from NBR website where a taxable person has to provide all the transaction details which is associated with the taxable sales and purchases made and also the purchases from non-registered suppliers as well.

There are two types of proceedings for a taxable person while accessing your VAT Return Form for filing the VAT Return. It will be either,

• Paying the VAT liability, in case if your recoverable input VAT paid on purchases is lower than the VAT collected on taxable sales, then you have to pay the VAT liability.
• Claiming back the VAT refund will be applicable in case if the recoverable input VAT paid on purchases is higher than the VAT which is collected on taxable sales, then you can claim back the excess VAT paid from the Authority.

When to file your VAT Return?

To File for VAT Return, taxable businesses registered for VAT in Bahrain should file as per their Tax Period. The Tax liability has to be paid to NBR and if it is refunded it should be claimed from the National Bureau for Revenue (NBR).

The time period for filing the VAT Return is until the last calendar day of the following month that has been mentioned in your VAT Return Filing period.

VAT Return Filing Schedules and Deadlines in Bahrain

For Businesses in Bahrain having an annual turnover of more than 5 Million BHD, these kinds of businesses have to file for their VAT on a quarterly basis. The VAT Return has to be filed by the last calendar day of the month of the quarterly tax period.

For example

• If your first tax period is from 1^st January 2019 to 31^st March 2019 the VAT return must be filed by 30 April 2019.

For Businesses in Bahrain having an annual turnover of less than 5 Million BHD there are few points to be taken for consideration on when to file for their VAT Return as mentioned below:

• Taxable Businesses in Bahrain who has registered for VAT after 1^st January 2019, but before 1^st July 2019: for such kind of businesses, the first tax period shall start on the effective date of their VAT registration and will end on 30^th June 2019 irrespective on the value of their annual supplies. In such cases, VAT Return must be filed by 31^st July 2019. Thereafter VAT Return must be filed on a quarterly basis for the last two quarters of 2019.
• Taxable Businesses in Bahrain who registers for VAT on or after 1^st July 2019, but before 1^st October 2019: for such kind of businesses, the first Tax Period shall start on the effective date of their VAT Registration and will end on 30^th September 2019 irrespective on the value of their annual supplies. In such cases, VAT Return must be filed by 31^st October 2019. Thereafter VAT Return must be filed on a quarterly basis for the last one quarter of 2019.
• Taxable Businesses in Bahrain who registers for VAT on or after 1^st October 2019, but before 31^st December 2019: for such kind of businesses, the first Tax Period shall start on the effective date of their VAT Registration and will end on 31^st December 2019 irrespective on the value of their supplies. In such cases, VAT Return must be filed by 31^st January 2020.

How is VAT Return Filing structured from 2020?

• Taxable Businesses in Bahrain having an annual turnover of more than 3 Million BHD will have to file for their VAT Return on a monthly basis.
• Taxable Businesses in Bahrain having an annual turnover of less than 3 Million BHD will have to file for their VAT Return on a quarterly basis. Return filing quarters ending 31 March, 30 June, 30 September and 31 December.

Note: From the end of the tax period, all taxable businesses in Bahrain will have to file for their VAT Return by the last calendar day of the following month. For example:

• If taxable businesses in Bahrain are filing VAT Return on a monthly basis, their tax period is 1^st January 2020 to 31 January 2020, which means that the VAT Return should be filed by 29 February 2020.
• If taxable businesses in Bahrain are filing quarterly VAT returns, if there the tax period is 1^st January 2020 to 31 March 2020, which means that the VAT Return must be filed by 30 April 2020.

What is the penalty for not filing of VAT Return?

In case of failure to submit the Tax Return or the late payment of Tax within the prescribed period, the penalty will be a minimum rate of 5%, and shall not exceed 25% of the value of the Tax which should be declared or paid and also if it exceeds the sixty days of the expiration of tax period, shall be punished by imprisonment for a period not less than 3 years and not exceeding 5 years.

Kindly note that all VAT-registered businesses in Bahrain should submit their VAT Returns on time and as prescribed by NBR irrespective of whether there is no VAT to pay or to reclaim.

Emirates Chartered Accountants offer VAT Return Filing Services in Bahrain. Our tax officers are professionally equipped and well versed with the tax laws of the Kingdom of Bahrain and have in hand experience of handling VAT in other GCC countries. When VAT Return is Filed by our Tax Officers there is precision on the segregation of supplies that should be filled in your VAT Return form which would minimize the risk of penalties and fines that would incur for non-compliance of VAT Law. We are operating our head office in Dubai as Emirates Chartered Accountants Group holding many activities like auditing, Tax Service, Company Formation etc

Our VAT Services in Bahrain are:

• VAT Registration
• VAT Training 
• VAT Implementation 
• VAT Return Filing
• VAT Consultancy
• Accounting for VAT Compliance