Answers to the most common questions about registration for VAT in Bahrain: FAQs

What are taxable and non-taxable persons?

Those who register under VAT and are eligible to be taxed are called taxable persons and those who do not register are called non-taxable persons.

Who must register under VAT?

Since different rules apply to residents and non-residents, let’s take a look at them separately.

Mandatory registration for residents of Bahrain

Residents of Bahrain who are required to register for VAT are given different deadlines depending on the value of their annual supplies:

• Those taxable persons with annual supplies worth more than, or expected to be more than, BHD 5,000,000 must register for VAT by the 20th of December, 2018. These taxpayers will be VAT compliant starting on the 1st of January, 2019.

• Those taxable persons with annual supplies worth more than, or expected to be more than, BHD 500,000 but less than or equal to BHD 5,000,000 must register for VAT by the 20th of June, 2019. These taxpayers will be VAT compliant starting on the 1st of July, 2019.

• Those taxable persons with annual supplies worth more than, or expected to be more than, BHD 37,500 by the 1st of January, 2020, must register for VAT by the 20th of December, 2019. These taxpayers will be VAT compliant starting on the 1st of January, 2020.

• Taxpayers who at first did not expect to have supplies worth more than BHD 5,000,000 but have exceeded this limit, must register for VAT within:

  • 30 days after the last day of the month in which they exceeded the limit, or

  • If they have not yet exceeded the limit but expect to, then within 30 days before the first day of the month in which they expect to exceed the limit.

• Taxpayers who at first did not expect to have supplies worth more than BHD 500,000, but have exceeded this limit after the 1st of July, 2019 must register for VAT within:

  • 30 days after the last day of the month in which they exceeded the limit, or

  • If they have not yet exceeded the limit but expect to, then within 30 days before the first day of the month in which they expect to exceed the limit.

Mandatory registration for non-residents of Bahrain

• Unlike residents, all non-residents must register for VAT as soon as they start making taxable supplies in Bahrain, regardless of the value of their supplies.

• Non-residents may choose to register under VAT using a tax representative, a resident of Bahrain who has been approved by the NBR through an official power of attorney. If a non-resident taxable person has any tax liabilities, their tax representative will also be held accountable for the liabilities.

How can I register under VAT?

To register under VAT:

1. First, create an account on the official website of the National Tax Authority.

2. Provide identifying information like your business details, commercial registration details, financial information, personal details, and documents of proof.

3. After submitting the request, you should receive an email from the NBR saying that your request was received and is being processed.

4. Once your account has been created and approved, you will be given credentials to log in and access their registration form. Log in to your account to complete their registration process.

5. After your registration is confirmed and complete, you will receive a VAT certificate to your account, which includes your VAT registration number.

Learn more about how to register under VAT.

When is a person exempt from mandatory VAT registration?

A person is exempt from mandatory VAT registration when they meet all of the following conditions:

• They only supply goods or services that are zero-rated under VAT.

• The value of the zero-rated supply exceeds the mandatory threshold.

• They do not receive any goods or services that are liable to standard-rate VAT under the reverse-charge mechanism.

What happens after I request exemption from registering with the NBR?

After requesting exemption from registering, you must wait for the NBR to approve your request. Once approved, you will be considered a non-taxable person and you will not be allowed to collect VAT on your supplies nor recover VAT. At any point during the course of your business, if you stop qualifying for exemption from VAT, you must apply to register within 30 days from the day you stopped qualifying. Applying later than that may incur a penalty of up to BHD 10,000.

Who can register voluntarily under VAT?

Those who are not required by law to register under VAT can still choose to do so on a voluntary basis if they meet one of these two conditions:

• The value of their annual supplies or expenses in Bahrain has exceeded BHD 18,750 in the past year.

• The value of their annual supplies or expenses in Bahrain is expected to exceed BHD 18,750 in the coming year.

The date of registration starts from the day the NBR approves the request of voluntary registration.

What criteria must be met to be eligible for tax group registration?

The following conditions must be met for the NBR to approve a registration from a tax group:

• All members of the tax group must be a part of an economic activity.

• All members of the tax group must be residents of Bahrain.

• All members of the tax group must be registered under VAT for tax purposes.

• All members of the tax group must be related, where the term related can be defined as any of the following conditions:

  • Two or more members of a tax group must be in a formal partnership that meets at least one of the following:

  1. When added together, members have a voting interest of at least 50%.

  2. When added together, members have a market value interest of at least 50%.

  3. Members have control in some other form. (It should be noted that common ownership does not always mean that the owner is a member of he tax group.)

The members of the tax group must provide evidence that they have met all the requirements mentioned above. If they are unsure about whether or not they have met these conditions, but feel that they have enough reason to be considered as a group, they can still apply for tax group registration and be evaluated by the NBR.

When is a person required to de-register under VAT?

When a taxpayer no longer meets the conditions to be registered under VAT, they are required to apply for de-registration. They must de-register within 30 days from the day they no longer meet the requirements.

Under what conditions is a taxpayer required to de-register on a mandatory basis?

Both resident and non-resident taxpayers are required to de-register when they no longer meet the criteria to be registered. Let’s look at the conditions for residents and non-residents individually:

Both residents and non-residents must de-register when: They are no longer conducting any economic activity in Bahrain, or They have not made any taxable supplies for 12 consecutive months.

A resident must de-register when:

• The value of their annual supplies and expenses during the last 12 months has dropped to lower than the voluntary registration limit, and

• The value of their annual supplies and expenses is not expected to exceed this limit in the upcoming 12 months either.

Under what conditions can a taxpayer de-register on a voluntary basis?

A resident may de-register on a voluntary basis when:

• They are voluntarily registered under VAT for a minimum of 2 years,

• The value of their annual supplies in the past 12 months is lower than the mandatory registration threshold (BHD 37,500), but including their annual expenses it exceeds the voluntary registration limit (BHD 18,750), and

• The value of their annual supplies in the upcoming 12 months is expected to be lower than the mandatory registration limit (BHD 37,500), but including their annual expenses it exceeds the voluntary registration limit (BHD 18,750).

A non-resident cannot de-register on a voluntary basis at all.