Verifying Vat Registration In Bahrain: Quick And Easy Guide

Bahrain introduced Value Added Tax (VAT) on 1 January 2019. VAT registration is mandatory for businesses with a certain level of taxable supplies, while some businesses can choose to register voluntarily and others are not eligible to register at all. Non-residents must register for VAT within 30 days of their first taxable supply to non-taxable persons in Bahrain. Once a business has registered for VAT, it will receive a unique Tax Identification Number (TIN) from the National Bureau for Revenue (NBR) and will be authorised to charge and collect VAT on taxable supplies. This paragraph will explore the process of checking a VAT registration number in Bahrain.

Mandatory registration

Mandatory VAT Registration in Bahrain

VAT registration is mandatory for businesses and individuals in Bahrain if their annual revenue exceeds a certain threshold. The threshold for mandatory VAT registration is an annual revenue of more than BHD 37,500 but not more than BHD 500,000. If a business or individual meets this criterion, they are required to register for VAT by the deadline corresponding to their revenue level.

For those with an annual revenue of more than BHD 5,000,000, the deadline to register for VAT was 20 December 2018, and they were required to be VAT compliant by 1 January 2019.

For those with an annual revenue of more than BHD 500,000 but less than or equal to BHD 5,000,000, the deadline to register for VAT was 20 June 2019, and they were required to be VAT compliant by 1 July 2019.

For those with an annual revenue of more than BHD 37,500, the deadline to register for VAT was 20 December 2019, and they were required to be VAT compliant by 1 January 2020.

It is important to note that these deadlines applied to the initial phase of VAT implementation in Bahrain. For ongoing mandatory registration requirements, businesses and individuals must evaluate their annual revenue and determine if it exceeds the threshold for the current year. If it does, they must register for VAT within 30 days after the last day of the month in which they exceeded the limit or within 30 days before the first day of the month in which they expect to exceed the limit.

Non-resident businesses or individuals in Bahrain must register for VAT as soon as they start making taxable supplies in Bahrain, regardless of the value of their supplies. The only exception to this rule is if a non-resident business is shipping goods from another country to a private individual customer in Bahrain, in which case they are not required to register for VAT. However, if the buyer is a registered business in Bahrain, a reverse charge mechanism may apply, allowing them to credit import VAT in their tax return.

Voluntary registration

In Bahrain, some businesses are required to register for VAT, some can choose to register voluntarily, and others are not eligible to register at all. Those who register for VAT are called taxable persons, and those who do not are called non-taxable persons.

A person can voluntarily seek VAT registration in Bahrain in the following two cases:

• The total worth of their annual supplies or expenses in Bahrain has exceeded BHD 18,750 in the past year.
• The total worth of their annual supplies or expenses in Bahrain is expected to exceed BHD 18,750 in the coming year.

The threshold for voluntary VAT registration in Bahrain is BHD 18,750, which is 50% of the mandatory VAT registration threshold.

Businesses that take voluntary VAT registration in Bahrain generally do so for the benefit of input tax deduction, i.e., the facility to deduct input tax (tax paid on purchases) from the output tax (tax collected on sales) and only remit the balance tax payable to the Government. This is a major benefit of taking a VAT registration. Businesses that don’t have a Bahrain VAT registration will not be able to claim an input tax deduction, and the VAT paid on purchases or expenses becomes a cost.

There are other benefits of registering under VAT, such as the ability to issue a VAT invoice and the credibility that comes with a Bahrain VAT registration.

How to Register for VAT

To register under VAT, follow these steps:

• Visit the official website of the National Revenue Agency and click "Create NBR Profile".
• You will be redirected to a page of instructions on how to create your NBR profile. Click on the agreement box before resuming the registration process.
• Complete the form with identifying information like your business details, commercial registration details, financial information, and personal details. You will also be asked to upload a few documents as proof.
• Check the declaration box and submit your request to create an account with the National Revenue Agency of the Gulf. You should receive an email from the NBR saying that your request was received and is being processed.
• If your account has been approved, you will be sent credentials to log in and access your registration form. Log into your account to confirm your registration.
• After your registration is confirmed and complete, you will receive a VAT certificate in your account that includes your VAT registration number.

Non-resident registration

There are no exceptions for non-residents of Bahrain; 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 are obligated to register for VAT in Bahrain within 30 days from the first taxable supply to non-taxable persons in Bahrain, regardless of any thresholds. The threshold for mandatory VAT registration in Bahrain is BD 37,500.

Non-residents are given the option to register under VAT using a tax representative. A tax representative is a resident of Bahrain who has been approved by the NBR through an official power of attorney. A tax representative will also be held accountable for any tax liabilities that the non-resident taxable person incurs.

A non-resident may register for VAT through a VAT representative. A VAT representative must be a resident in Bahrain and duly approved by the NBR. The appointment as a VAT representative must be done by way of an official power of attorney.

If a non-resident is registered for VAT in Bahrain, they must deregister within 30 days of any of the following events occurring:

• They no longer carry out economic activity in Bahrain.
• They have not made any VAT-able revenue for 12 consecutive months.

The only situation in which a non-resident business must be registered for VAT in Bahrain is when a business uses a local warehouse to store goods for B2C sales.

Tax group registration

Two or more legal taxable persons who are residents of Bahrain may be registered as a single tax group, provided they meet the conditions and procedures specified in the Regulations. All members of the tax group must be jointly liable for the tax obligations of that tax group during their registration period. The National Bureau for Revenue (NBR) may amend or deregister the tax group in accordance with the conditions, circumstances, and procedures specified in the Regulations.

To be approved by the NBR, tax groups must abide by the following criteria:

• All members of the tax group must be 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.

The term "related" can be defined by 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 conditions:
• When added together, members have a voting interest of at least 50%.
• When added together, members have a market value interest of at least 50%.
• Members have control in some other form.

The members of the tax group must also provide evidence that they have met all the requirements mentioned above. If they are unsure about whether they have met these conditions but feel they have something that ties them together as a group, they can still apply for tax group registration and be evaluated by the NBR.

Exemption from registration

Exemption from VAT registration in Bahrain

Not everyone who supplies goods and services is required to register under VAT. Suppliers who meet all of the following conditions can request exemption from registering under VAT:

• The goods or services that the person supplies are zero-rated under VAT.
• The total worth of the zero-rated supply exceeds the mandatory threshold.
• The person does not receive any goods or services that are subject to standard-rate VAT under the reverse-charge mechanism.

Once the person requests exemption from registering, they must wait for approval from the NBR (National Bureau for Revenue), after which they will be considered a non-taxable person. As a non-taxable person, they will neither be allowed to collect VAT for their supplies nor recover VAT. If the person ever stops qualifying to be registered under VAT, they must apply to deregister within 30 days after the day they stopped qualifying. Note that applying later than that may incur a penalty of up to BHD 10,000.

A taxable person should deregister if they are no longer carrying out an economic activity or if they’ve stopped making taxable supplies in the past 12 consecutive months. They will also be eligible for deregistration if the value of their taxable supplies for the previous 12 months falls below the voluntary threshold and is not expected to exceed the voluntary threshold for the next 12 months.

A taxable person can choose to apply for deregistration if the value of their annual taxable supplies for the past 12 months falls below the mandatory threshold of BHD 37,500 but exceeds the voluntary threshold of BHD 18,750.

Frequently asked questions