The Gulf Cooperation Council (GCC) countries signed the Common VAT Agreement back on June 2016 to implement VAT at rate of 5% setting the general framework that the respective states shall follow when implementing their domestic VAT regulations.   Actual VAT system implementation was started first on 1 January 2018 by Saudi Arabia and the UAE then followed by Bahrain when they released the VAT Law on 9 October 2018 thereafter issued the Resolution No. 12 of 2018 Related to Issuing the Executive Regulations of the VAT Law Issued by Decree-Law No. 48 of 2018.   Rest of GCC countries are expected implement the VAT too in 2019.

Filing VAT Return
VAT registered businesses, according to the assigned registration threshold have to submit a ‘VAT return’ to the Tax Authority at the end of each tax period. the VAT return summarizes the supplies and purchases values has been made during the tax period to report the VAT liability which is the difference between the output tax payable (VAT charged on supplies of goods and services) for a given tax period and the input tax (VAT incurred on purchases) recoverable for the same tax period.  

In case of the output tax exceeds the input tax, the variance should be paid to the Tax Authority. However, when the input tax exceeds the output tax, will have the excess input tax refunded.  
Failure to file a tax return 
Failure to file a tax return within the specified timeframe will make the violator liable for fines as per the executive tax law.

FIN CLOUD professionals can assist organizations with the VAT implementation in Bahrain from a consulting, compliance, reporting and representation standpoint.

Case Study and Assessment
Initial step in order to have a full understanding for the VAT applicability on a business is to conduct an assessment identify all areas and transactions affected with the VAT Law.

Our tax professionals are able to assist you with any question relating to the upcoming changes, including, but not limited to, nexus study, taxability review, supply chain analysis, and review of compliance requirements.

Assist the client with the preparation and filing of the new VAT returns.

With the VAT implementation, calculation and filing.

In front of external auditors as well as the Tax Authority.