What is Voluntary VAT Registration &Mandatory VAT Registration Under VAT in Bahrain?

VAT registration is required for all companies whose taxable turnover exceeds the mandatory VAT registration threshold, ie BHD 37,500/. However, Voluntary VAT Registration option is available for a business having turnover BHD 18,750 or more, but less than BHD 37,500/. National Bureau of Taxation has given extension for companies to registering under mandatory options as follows:

• Companies having turnover BHD 5 Million or more have to do mandatory VAT registration on or before 20^th December 2018
• Companies having turnover BHD 500,000 or more have to do mandatory VAT registration on or before 20^th June 2019.
• All other companies having turnover BHD 37,500/ or more have to do mandatory VAT registration on or before 20^thDecember 2019.

However, companies falling under mandatory VAT registration option can register even before the extended period voluntarily. For example, if ABC WLL has turnover BHD 100,000/ for last 12 months, it is not necessary for the company to wait till 20^thDecember to register under National Bureau of Taxation. It can proceed for registration at any time before that.

What are the benefits for companies registering under voluntary VAT registration option under Bahrain VAT?

 The benefits of opting the voluntary VAT registration in Bahrain are given below:

• To Avoid Cost – If a company doesn’t register under the National Bureau of Taxation, the VAT they pay to their suppliers and service providers cannot be recovered. Hence it will be a cost for the company. It is recommended to register companies even under voluntarily VAT registration options to reduce the cost of operations. While importing goods or services from outside the Kingdom of Bahrain, the company can claim the VAT amount charged by the way of Reverse Charge Mechanism only if they are registered.
• To Avoid Penalties – Another advantage of Voluntary VAT Registration by the companies that they need not have to worry about crossing the mandatory VAT registration threshold limit and thus relieve from last day rush and thus avoid the penalties.
• To Create a good impression to the Customers- Through voluntarily VAT registering your company, it will create a good impression to the customers, suppliers, third parties etc. that your business is bigger and thus gives the business greater credibility and a better reputation.
• To Smoothen the operations of the company – Some companies will not be willing to do business with unregistered companies. So, through voluntary VAT registration, the company can easily deal with the potential customers and suppliers.

We VFM has a team of tax professionals at Bahrain to support the business community. Our vast experience in implementing VAT in the UAE as well as in India is a competitive advantage for us for serving better in the Kingdom of Bahrain.

We provide the below mentioned VAT Services in Bahrain:

• VAT Implementation
• VAT Registration
• VAT Compliance
• VAT Return Filing
• VAT Advisory
• Excise Tax Registration
• Excise Tax Advisory