Business houses urged to register without fail as VAT deadline looms

Businesses in Bahrain have been urged to voluntarily register for VAT to avoid unnecessary losses, it is learnt. If the business’s annual supplies do not exceed or are not expected to exceed BD5,000,000, then the entity is not expected to register for VAT. However, if the business’s annual supplies exceed the voluntary VAT registration threshold of BD18,750, it can voluntarily register for VAT.

Businesses that chose not to voluntarily register may rack up unnecessary losses, according to experts. This is because these businesses will be paying for VAT added goods by purchasing from VAT registered companies but would not be able to pass on VAT to their customers, said BCCI Chairperson of Finance, Insurance, and Tax Committee, Sawsan Abdulhassan. “When a VAT registered company sells goods and services to a non-VAT registered company, the company charges VAT but the non-VAT company cannot pass on the VAT to the customer.

So for businesses to recover the tax from their side, they need to be registered,” Ms Abdulhassan told Tribune. BCCI board member Sonya Janahi said that the chamber is encouraging its members to register voluntarily. “Voluntary registration is something we encourage everyone to do. Because even if you are below five million thresholds, you might still be impacted if you are importing or buying from a company that is VAT registered.

“And if you are not registered you will not be able to claim the VAT. From our perspective, we encourage everyone to voluntarily apply for the VAT and make sure that their accounting systems are ready.” Speaking about the meeting held between BCCI and Finance and Commerce Ministers, BCCI first vice-chairman Khalid Najibi said, “During the meeting, the chamber stressed the importance of enhancing the implementation mechanism of the VAT, clarifying all the technical and legal aspects of the tax, and taking into consideration the readiness of the private sector.”