Let's discuss the VAT registration category for Business in Bahrain

Let's discuss the VAT registration category for Business in Bahrain Overview Bahrain has opened the doors for economic development to support its lingering economy by taking one of the historical decisions to enter the VAT regime. It got mixed reviews across the country. Though some praised and welcome the implementation many others were not at all happy with it.

With the implementation of VAT, the working structure of the businesses in Bahrain got affected greatly. But it has been mandated, so the Bahrain VAT registration is a must for every business entity over there.

What is the VAT registration process for business entities?

1. In Bahrain’s VAT registration process, all the business entities, single owners enlist themselves to the National Bureau of Registration (NBR).

2. After enlistment, the unique VAT number is assigned by NBR to the business entities and single owners.

3. If a person owns two different businesses, separate registration for each business would be required, and NBR will issue separate unique VAT numbers for all the two businesses.

4. As per the law over there, on exceeding the specified threshold business entities and single owners must reimburse VAT in Bahrain.

What are the categories formed by NBR for business entities?

The categories being formed by NBR for the enlistment of the business entities, single owners are as follows:

Mandatory VAT Registration: In this VAT registration, it is mandatory for the business entities, and owners to register themselves to NBR under following conditions: a. If the annual business turnover is more than or expected to cross BHD 5,000,000 in any financial year. b. If the annual business turnover is more than or expected to cross BHD 500,000 to BHD 5,000,000 in any financial year. c. If the turnover is between BHD 37,500 to BHD 500,000 in any financial year.

Voluntary VAT Registration: This VAT registration is not mandatory and purely voluntary for the business entities, and owners under the following conditions: a. If the annual business turnover is more than or expected to cross BHD 18,750 in any financial year. b. If the business owners believe that the VAT registration is beneficial for their business in the long-run.

Non-residents VAT Registration: This VAT registration is for a non-resident of Bahrain under the following conditions: a. If they want to start any business or do any type of financial transactions in Bahrain. b. They can engage a tax representative on their behalf or can also directly register themselves with NBR for VAT. c. They must register themselves within the 30 days of their first payment towards supply.

Tax group VAT registration: This VAT provision serves as a single-window to two or multiple businesses. Business entities or owners can enlist themselves as a TAX group with NBR. There are certain conditions under this VAT registration: a. Any tax obligation from any activity under this group will be treated as a single entity. b. All the members under the tax group will remain liable for such obligations.

c. NBR reserves the right to delist this group if found not at-par with the VAT standards and under the non-satisfactory conditions relating to procedures, terms, and conditions.

Conclusion Bahrain VAT registration is the first compliance activity for all the businesses over there. It is the duty of business entities and owners to check their compliance and obligations to register under VAT. And in case of any trouble in the whole process, they can engage with the taxation professionals for futuristic and beneficial advice.