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Basic Analysis of the VAT Framework and How VAT Consultants in Bahrain Can Help

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5% Value Added Tax (VAT) has been applied in the Kingdom of Bahrain from 1 January 2019. The National Bureau for Revenue (NBR) is responsible for the implementation, management and recording of VAT and related obligations, validation of the submitted statements, and evaluation of such matters. The NBR also reimburses the recoverable amount, collect any outstanding amounts, and perform audits and is also responsible for considering and issuing decisions related to grievances and following up and implementing compliance with VAT on an on-going basis. VAT consultants in Bahrain can help smoothen out the steps needed for businesses to configure VAT easily.

VAT Consultants in Bahrain

The Gulf region (including the Kingdom of Bahrain), has long been considered an attractive and low-tax environment. Infrastructure development, access to high-potential growth markets in Africa and Asia, free-trade zones, competitive labour costs, few trade barriers and economic and political stability are all factors which add to the region’s appeal. In addition, VAT has a neutral impact on registered businesses when managed efficiently.

The Kingdom of Bahrain is the third GCC country, following the UAE and the Kingdom of Saudi Arabia, to implement VAT. Even though the basic framework of the law remains the same, there are a few key differences that set Bahrain’s VAT law apart from the other countries. For instance, Bahrain imposed zero-rated tax on basic food items, education, health, construction of new buildings, some transportation, oil, and gas.

How VAT Consulting Services Can Help

VAT invoices and accounting records must be kept for no less than 5 years from the end of the year the invoice was issued. For real estate properties, the VAT invoices and accounting records must be kept for 15 years. Moreover, a taxable person shall be required to register for VAT purposes in the Kingdom of Bahrain if the annual value of supplies, exceeds, or is expected to exceed, the mandatory registered threshold of BD 37,700.

Understanding and preparing for VAT is essential to ensuring that businesses are not exposed to financial or regulatory risk, as a result of the tax being implemented. VAT advisors and VAT consultants in Bahrain can readily help clients to ensure that their transition to VAT is smooth and efficient, from planning to implementation and beyond. They can assist with the nexus study, taxability review, supply chain analysis and review of compliance requirements of the business. They also prepare and help with the filing of the VAT returns.

VAT consultants in Bahrain can thus help businesses with the assessment of VAT applicability, processing and system, VAT Registration and obtaining the ‘Tax Registration Number’, training the team for software implementation, evaluate the working capital requirement and payment cycle in light of the VAT regime, advising the company in terms of applicability of VAT in each identified transactions and training the staff- in- charge of the same for legal compliances, VAT liability computation as well as filing of returns.

An added advantage of dealing with professional VAT advisors is that they are always one step ahead in the industry knowledge, updated on any new changes in the laws and regulations and their diversified industry background and hand on experience helps the clients make their tax journey smoother.