VAT return

What is VAT Return?

A VAT eligible VAT payer pays VAT on his subject to VAT purchases (input VAT) and collects VAT on his subject to VAT sales (output VAT). In other terms, the VAT payer collects VAT on behalf of the National Bureau for Revenue (NBR) and has the right to claim back the VAT paid on his subject to VAT purchases as per chapter 11 of VAT Executive Regulations.

The VAT payer is required to submit details of his transactions related to subject to VAT sales and purchases by submitting an electronic form called the “VAT Return Form”.

Following the submission of the VAT Return Form, VAT payers will be asked to either:

1. Pay the VAT liability, if the recoverable input VAT paid on purchases is lower than the VAT collected on subject to VAT sales or,
2. Claim back a VAT refund or carry forward the VAT credit if the recoverable input VAT paid on purchases is higher than the VAT collected on subject to VAT sales

The submission of the VAT Return Form is commonly referred to as VAT return filing.

When to file VAT returns?

Filing during 2019

A VAT period is the period for which a subject to VAT person is required to:

• Report and pay output VAT, collected on subject to VAT sales and due to the NBR; and
• Report and claim recoverable input VAT paid on subject to VAT purchases from the NBR

At the end of each VAT period, the VAT payer will have until the last calendar day of the following month (filing period month) to submit the VAT Return Form summarizing the output VAT due and input VAT recoverable for that VAT period; this month is called the “filing period”.

Note: Please refer to Article (109) of the Executive Regulations for further detail

Subject to VAT persons with annual VATable supplies exceeding 5MM BHD

These VAT payers have quarterly VAT periods and are required to file VAT returns by the last calendar day of the month following the end of the quarterly VAT period. For example:

• For the VAT period 1 January 2019 to 31 March 2019 the VAT return must be filed by 30 April 2019

Subject to VAT persons with annual VATable supplies below 5MM BHD

• For subject to VAT Persons whose registration takes effect after 1 January 2019, but before 1 July 2019, the first VAT Period starts on the effective date of their registration and ends on 30 June 2019, regardless of value of annual VATable supplies. The VAT return must be filed by 31 July 2019. Thereafter and until the end of 2019, subject to VAT persons must file on a quarterly basis for the last two quarters of 2019.
• For Subject to VAT Persons whose registration takes effect on or after 1 July 2019, but before 1 October 2019, the first VAT Period starts on the effective date of their registration and ends on 30 September 2019, regardless of the value of annual VATable supplies. The VAT return must be filed by 31 October 2019. Thereafter, subject to VAT persons must file on a quarterly basis for the last quarter of 2019.
• For Subject to VAT Persons whose registration takes effect on or after 1 October 2019, but before 31 December 2019, the first VAT Period starts on the effective date of their registration and ends on 31 December 2019, regardless of the value of annual VATable supplies. The VAT return must be filed by 31 January 2020.

Filing from 2020 onwards

Subject to VAT persons with annual VATable supplies exceeding 3MM BHD will have monthly VAT periods.

Subject to VAT persons with annual VATable supplies not exceeding 3MM BHD will have VAT periods corresponding to the monthly calendar quarters (i.e., ending 31 March, 30 June, 30 September and 31 December).

From the end of the VAT period (as defined above), all subjet to VAT persons will have until the last calendar day of the following month to file their VAT return. For example:

• If monthly returns are required for the VAT period 1 January 2020 to 31 January 2020, the VAT return must be filed by 29 February 2020.
• If quarterly returns are required for the VAT period 1 January 2020 to 31 March 2020, the VAT return must be filed by 30 April 2020. However, such persons may elect to file monthly returns subject to approval by NBR.¹

Note: Please refer to Article (48) of the Executive Regulations for further detail
1- Applicable starting 2020 onwards, will not be in effect in 2019

How to file VAT Returns?

The VAT Return Form is the official document summarizing the total output VAT due, the total input VAT recoverable and the corresponding VAT liability. The form is the same, regardless of the size of the VAT payer. To access their VAT Return Form, users will first need to be signed-up and electronically registered with NBR.

Entities subject to VAT need to file their VAT returns by following the below steps:

1. Users must log-in to their filing account on NBR’s website.
2. Users must read the instructions page and ensure that their VAT payer details are correct before filling the VAT return form.
3. Users may then proceed to fill in the required fields on the VAT return form, all of which are summarized in the “Submission and Payment” section below. Further details can be found on the form itself.
4. Once the correct details have been provided, users may submit their return form through NBR’s website.
5. When the VAT Return Form is submitted online and received by NBR, the user will receive an acknowledgement notification via email. The VAT invoice (for debit returns) are accessible in PDF format through the link shared in the email as well as on the user profile page in filing account.

VAT Return Form is shown below:

1. Sales are defined as supplies made by the VAT payer according to the VAT law
2. This field will not be editable at present, further communication to come once activated

VAT Return Forms can be amended if necessary, e.g. in cases of errors on the VAT Return Forms, within 30 business days from the date the Subject to VAT Person became aware of the error on his VAT Return Form, and prior to NBR commencing supervision and inspection procedures.

To submit an amended VAT Return Form, the same steps as the submission of a VAT Return Form (set out above) can be used.

Kindly refer to the “VAT procedures and filing” section of the Technical FAQs on the website for more information.

Submission and payment

A VAT payer should make the payment of the VAT due by the last calendar day of the month following the end of the VAT period. VAT payers should ensure that payments are made in proper time for it to be received by the NBR on that day.

Each line item in the VAT Return Form is described in further detail below:

1. Standard rated sales: Total amount of standard rated goods and services (excluding VAT collected) sold during the current period in The Kingdom of Bahrain and VAT that was collected on their sale or adjustments to similar sales made in the previous reporting periods. Please refer to the technical FAQs for the list of standard rated goods and services. Examples of adjustments include, return of goods and services by customers on which you have declared/paid VAT to NBR, sales made to tourists under a VAT refunds for tourist scheme and refunded to the refund operator, bad debt write-off on standard rated receivables.
2. Sales to registered VAT payers in other GCC states: Total amount of sales to GCC states and all adjustments to sales to registered customers in GCC states will be treated as exports until integrated GCC customs system goes live. Thus, for the time being this field will be “display only” and not editable.
3. Sales subject to domestic reverse charge mechanism: Total amount of sales and adjustments to sales (including those made in previous periods) that were standard rated but made to a domestic purchaser who has the right granted by NBR (supported by a valid certificate) to apply the domestic Reverse Charge Mechanism.
4. Zero-rated domestic sales: Total amount of all goods and services (excluding VAT collected) that were zero-rated and sold during the current period in The Kingdom of Bahrain or adjustments to similar sales made in the previous reporting periods. Please refer to Chapter 14 of the VAT Regulations (Article 67 – 80) or browse the Technical FAQs for more information on zero rated (0%) goods and services. Examples of adjustments include, returned zero-rated sales in Bahrain, bad debt write-off on zero-rated domestic receivables.
5. Exports: Total amount of standard rated, zero-rated and exempt goods and services (excluding VAT collected) sold during the current period in countries outside the Kingdom of Bahrain or adjustments to similar exported sales made in the previous reporting periods. Please refer to the Technical FAQs for standard-rated (5%) and zero-rated (0%) goods and services as well as exempt sales. Examples of adjustments include, returned exports, bad debt write-off on exports receivables.
6. Exempt Sales: Total amount of goods and services (excluding VAT collected) sold during the current period that were exempt in the Kingdom of Bahrain or adjustments to similar exempt sales made in the previous reporting periods. Please refer to Chapter 15 of the VAT Regulations (Article 81 – 85) or browse the Technical FAQs for the list of exempt goods and services. Examples of adjustments include, return of exempt goods, bad debt write-off.
7. Total Sales (automatically calculated): Aggregated amount of goods and services (excluding VAT collected) sold.
8. Standard rated domestic purchases: Total amount of goods and services (excluding VAT paid) purchased during the current period that were standard rated and bought in the Kingdom of Bahrain or adjustments to similar purchases made in the previous reporting periods. Please refer to the Technical FAQs for the list of standard rated goods and services. Examples of adjustments and apportionments include, return of standard rated domestic purchases to suppliers, portion of standard-rated domestic purchases used to make exempt sales.

   Note: 100% of input VAT on standard rated domestic purchases can be claimed back only when 100% of the goods and services in question are used for standard rated and zero-rated sales. No input VAT can be claimed back for the proportion of standard rated domestic purchases used to make exempt goods and services. In cases where standard rated domestic purchases are used to make exempt sales, then appropriate input VAT must be deducted from the reclaim. Also, if apportionment is used AND adjustment to purchase for previous VAT periods also exists, this field will total both of them.

9. Imports subject to VAT either paid at customs or deferred: Total amount of goods (excluding VAT paid) purchased (paid or deferred) during the current period that were standard rated and imported or adjustments/apportionments to similar goods purchased or deferred made in the previous reporting periods. Designated importers must specify their standard rated imports or adjustments / apportionments made to imports. Please refer to the Technical FAQs for the list of standard rates goods and services. VAT amount auto-calculated should be exactly the VAT amount paid at Customs. Imports for which VAT has not been paid at Customs such as services, shall be reported under reverse charge mechanism. Examples of adjustments and apportionments include, portion of imports subject to VAT (A) paid at customs or (B) deferred by grant from NBR, used to make exempt sales.

   Note: 100% of input VAT on imports subject to VAT either paid at customs or deferred can be claimed back only when 100% of the goods and services in question are used for standard and zero-rated sales. No input VAT can be claimed back for the proportion of imports subject to VAT either paid at customs or deferred used to make exempt goods and services. In cases where imports subject to VAT either paid at customs or deferred are used to make exempt sales, then appropriate input VAT must be deducted from the reclaim.

10. Imports subject to VAT accounted for through reverse charge mechanism: Total amount of goods from other GCC countries and services (excluding VAT paid) purchased during the current period that were standard rated and imported and reverse charged or adjustments/apportionments to similar services purchased in the previous reporting periods. Under the reverse charge mechanism, the recipient of services accounts for any VAT due as opposed to the supplier. Under the reverse charge mechanism, the recipient of mostly services must declare/pay any VAT due in replacement of the foreign supplier. This excludes imports made under a deferral grant of NBR. Examples of adjustments and apportionments include, portion of imports subject to VAT accounted for through reverse charge mechanism used to make exempt sales.

    Note: For the VAT amount, 100% of input VAT on reverse charged imports can be claimed back only when 100% of the goods and services in question are used for standard and zero-rated sales. No input VAT can be claimed back for the proportion of reverse charged imports used to make exempt goods and services. In cases where reverse charged imports are used to make exempt sales, then appropriate input VAT must be deducted from the reclaim.

11. Purchases subject to domestic reverse charge mechanism: Total amount of goods and services (excluding VAT paid) purchased during the current period that were standard rated and purchased under a grant by the NBR on domestic reverse charge mechanism. Adjustments resulting from the return of purchases made under the domestic reverse charge mechanism do not have to be reported here, since VAT has not been paid at the time of purchase.

    Note: VAT payers with exempt sales do not qualify for the domestic reverse charge mechanism and can therefore not make an apportionment that results in a VAT payable.

12. Purchases from non-registered suppliers, zero-rated/exempt purchases: Total amount of goods and services (excluding VAT paid) purchased during the current period that were either zero-rated and purchased in The Kingdom of Bahrain, or zero-rated and imported from a country outside of The Kingdom of Bahrain, or purchased from a non-registered supplier or were exempt and either bought in The Kingdom of Bahrain or imported from a country outside of The Kingdom of Bahrain. Or adjustments (excluding VAT paid) made to similar goods and services purchased during previous reporting periods. Please refer to the Technical FAQs for a list of zero rated and exempt goods and services. Examples of adjustments include, return of purchases to non-registered suppliers, return of exempt purchases to suppliers.
13. Total purchases (automatically calculated): Aggregated amount of goods and services (excluding VAT paid) purchased.
14. Total VAT due for current period (automatically calculated): Total VAT calculated from aggregated VAT collected on sales and recoverable VAT paid on purchases.
15. Corrections from previous period (between ±5000BHD): If corrections to the previous return due to a mistake originating from the VAT payer, not triggered by a sale/purchase adjustment, entail a VAT liability correction between BHD 5,000 and BHD 5,000, specify the VAT correction (and not sales or purchases amount) in this field. For any other VAT corrections, the VAT payer has to submit a Self-Amendment form.
16. VAT credit carried forward from previous period(s) (automatically calculated): Total amount of credit in your VAT account from previous returns that has not been used to offset any outstanding liabilities or not been refunded. This amount will be used to offset the VAT liability (if any) for this return.
17. Net VAT due (or reclaimed) (automatically calculated): The total amount of VAT liability or credit for the current return. Any negative amount is VAT credit that can either be refunded or carried forward to offset VAT liability for the subsequent periods.