For tax-free shopping

Now, tourists visiting Bahrain can reclaim a percentage of the Value Added Tax (VAT) incurred during their stay in the Kingdom. The refund system also makes Bahrain, one of the few nations around the globe to have a 100 per cent digital tax refund system. The refund, a common practice introduced to increase visitors’ expenditure, is expected to bolster the tourism sector in the Kingdom, which hosts several high-profile international events including the Formula One Grand Prix.

VAT rules state that overseas visitors spending a minimum of BD100 during their stay of not more than two-months are eligible for tax reimbursements. Refunds will be made through a dedicated desk that connects over 400 registered businesses to the point of exit at Bahrain International Airport. “Two dedicated stands will be set up at the airport where tourists can avail hassle-free VAT refunds on their shopping,” according to Chief Commercial Officer of the Bahrain Airport Company, Ayman Zainal. Claimers are required to present their passports, entry visa permits, GCC National IDs, or residency permits for Bahraini nationals living abroad, when shopping VAT Free.

Claimers need to request VAT free tags, available at retail stores, upon completing their purchase. The tags can be attached to receipts, which will be validated along with purchased goods at the VAT refund desk during check out. Payments may be refunded by cash (up to BD500) or card through an integrated electronic system facilitated by the global payment operator, Planet which also operates the UAE’s tourist refund scheme. Tourists, according to Planet, will receive 85 per cent of the VAT paid, after deducting a fee of BD0.50 per VAT free tag validated.

Use this link (https://www. planetpayment.com/me - dia/4384/planet-bahrain-merchants-200519.pdf) to obtain the merchant registered in the scheme. Merchants opting to register for the scheme may do so by visiting Planet’s registration portal and providing the required details. Several details were revealed yesterday during a seminar organised by the National Bureau for Revenue (NBR), in collaboration with Planet on the scheme’s procedures.

The seminar, which attracted 67 representatives, familiarised participants with the scheme’s refund and registration processes during a resourceful question-and-answer session. “Planet is pleased to continue working with the National Bureau for Revenue in introducing Bahrain’s VAT tourist refund scheme to merchants through the recent seminars,” commented Eyad Al Kourdi, General Manager, Planet Tax-Free. “The fully integrated system underpins the Kingdom of Bahrain’s growing tourism and retail sectors as they attract international shoppers from across the world.”

India tops

Patrick Waldron, CEO of Planet, in a report published earlier, cited India as its top passenger source destination, particularly for jewellery and gold transactions.

“They are a nation that loves to shop overseas. They’re the fastest growing economy in the world with 7 per cent economic growth in 2018, and they are spending more on luxury brands such as Gucci or Chanel. And we are seeing their number of transactions grow significantly.”

GCC nationals

As per article 89 of the Refund of Tax by Tourists law any natural person (above 18 years old of age) who is not a resident in any of the Implementing States and who is not a crew member of a flight or aircraft leaving the Kingdom are eligible to apply for a refund. Under the current rules, all GCC nationals are eligible for the scheme (the exception being Bahraini citizens not residing outside of Bahrain.

5pc VAT

Bahrain joined the league of VAT implementing states in GCC from 1st January 2019 after the UAE and KSA. The standard VAT rate in Bahrain is 5 per cent, levied on all taxable supplies.

As of 18 February, over 2,000 local and international vendors had registered as VAT eligible companies in Bahrain. The sales tax was initially applied to companies having an annual turnover exceeding BD5 million.

Plant Payment was assigned as the endto-end provider of taxfree shopping system following a deal signed by Rana Faqihi, the assistant undersecretary for Public Revenues Development in August, according to state-run BNA.

“The collaboration with  Planet  is in line with the National Bureau for Revenue’s efforts in ensuring the correct implementation of VAT. The new refund system will be established and ready this year,” said Rana Faqihi earlier.