Voluntary VAT registration in Bahrain

The situation

Voluntary registration is possible when taxable supplies or expenses exceed BHD 18,750.

The law

• Decree-Law No. 48 of 2018: registration thresholds: Mandatory registration at BHD 37,500 of taxable supplies in the past or next 12 months; voluntary from BHD 18,750

What it means for you

Voluntary registration lets you recover input VAT and look established to corporate buyers. The cost is filing returns and charging 10% to customers. If most of your buyers are consumers, adding VAT raises your price; if they are VAT registered businesses, they recover it.

What to do

1. List your main customers.
2. Compare input VAT recovery with compliance cost.
3. Register on the NBR portal if worthwhile.
4. Set up returns.

Related

• Start charging VAT after registration
• Deregistering from VAT when sales fall
• Documents needed for Bahrain VAT registration
• Exempt sales and the VAT threshold
• Foreign company selling into Bahrain and VAT
• Bahrain VAT mandatory registration threshold