The National Bureau for Revenue (NBR) has issued updated guidelines to all companies and commercial business owners in Bahrain regarding compliance deadlines, registration thresholds, and electronic VAT reporting obligations.
Key Deadlines & Filing Frequency
VAT returns in Bahrain must be submitted, and any net tax due paid, by the last day of the month following the end of each tax period. Businesses are placed on either a monthly or quarterly filing cycle:
- Monthly Filings: Mandatory for businesses with annual taxable supplies exceeding BHD 3,000,000.
- Quarterly Filings: Standard cycle for businesses with annual taxable supplies of BHD 3,000,000 or less.
Compliance & Threshold Requirements
- The standard VAT rate is 10% (increased from 5% in 2022). Zero-rated sectors include basic foodstuffs, healthcare, education, new construction, and international transportation.
- Registration Thresholds: VAT registration is mandatory for any commercial entity with annual taxable turnover exceeding BHD 37,500. Voluntary registration is allowed for turnover or expenses exceeding BHD 18,750.
- Non-resident businesses making taxable supplies in Bahrain are required to register for VAT from the date of their first supply, regardless of the BHD 37,500 threshold.
- All registrations, declarations, and payments must be completed electronically via the official NBR portal.
Non-Compliance Penalties
Failing to apply for mandatory VAT registration within the required timeline can lead to administrative penalties of up to BHD 10,000. Late filing of returns or late payment of VAT is subject to penalties of 5% to 25% of the tax value due, and tax evasion carries severe criminal liabilities under Bahraini tax laws.