The norms for value added tax for businesses share a similar or more or less relevant interface; however, the case with Bahrain is quite different. It is known to almost everybody that Bahrain and the countries under the GCC that is Gulf Cooperation Council are the ones that have been significantly influenced by the demise of oil prices back in the year 2014. The impact has been significant as these nations known as at the Gulf countries have be highly dependable on oil industries when it came to enhancing their economic structure. The dependency has carried around for a long time now. Later, the oil pricing crisis underwent many measures in order to reduce the adverse effect of the caused crisis which also includes levying value-added tax. The starting of the year noted a significant levying of VAT in Bahrain.
Which of the Entities are Applicable for Value added Tax in Bahrain?
In the initial six months of imposing it, the VAT in Bahrain shall be fit for application just to the enterprises that vends goods and services to only Bahraini citizens with a yearly sales value exceeding the $13m (BD5m) mark. In the year of 2019, especially in the second half, the possibility of the taxation shall as well include enterprises with a yearly revenue that varieties between $1.3m (BD500,000) to $13m. The very last bracket of the entities are to be presented to VAT, on January 1st, in the year 2020, are enterprises with yearly sale value ranging between BD 37.5k to BD500k.
The Products and Services that are Subjected to 0% of VAT in Bahrain
This is one of the most significant factors to know about Bahrain VAT system. Here is a list of goods and services that are imposed with nil VAT in the nation.
- The Basic food items and products
- Academic sector
- Medicine sector which may include medical equipment and accessories
- The industry of real-estate including newly established projects
- The transportation sector
- Oil, oil derivatives, gas and industries
- Silver, Gold as well as platinum with a pureness of almost 98% or more which is apt for trading on global market
- Ornamental stones, especially pearlss
- Products those are subjected to suspension of custom duty
Those were the fundamentals to know About the Bahrain VAT system. Other than that, there is also certain penalty on failing to meet the Bahrain VAT. Trading bodies who fail to meet the VAT tax brackets or register shall undergo penalties that can even range up to BD10, 000.