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The VAT is being introduced in Bahrain from 1st January, 2019. It is important to understand the meaning of the frequently used terms and definitions under VAT. These terms will soon become a part of your daily business conversations with all your stakeholders. Let us understand the important terms under VAT in Bahrain, along with their respective meaning.
Terms |
Meaning |
Goods |
All types of physical assets that can be supplied, including real estate, water, and all forms of energy. |
Services |
Anything that can be supplied other than goods |
Supplier |
A person who supplies (sells) goods or services |
Recipient |
A person who receives (purchases) goods or services from a supplier |
Consideration |
Everything collected or to be collected by a supplier from the recipient or a third party for the supply of goods or services |
Taxable person |
A person, being a natural or legal person, who carries out an economic activity that requires them to register under VAT. Only a taxable person can charge VAT. |
Registrant |
A taxable person who has been issued a VAT registration number |
Export |
Supply of goods or services from Bahrain to another country |
Import |
Supply of goods or services from another country to Bahrain |
Capital assets |
Material and immaterial assets of a business allocated for long-term use |
Input tax |
Tax paid by a taxable person on goods or services purchased |
Output tax |
Tax charged by a taxable person on the supply of goods or services |
Input tax deduction |
A mechanism by which a VAT registered person can deduct input tax from the output tax for a period and only remit the balance tax payable to the Government. |
Taxable supplies |
Supplies on which VAT is charged and input tax deduction can be availed |
Exempted supplies |
Supplies on which no VAT is charged, and no input tax deduction can be availed |
Tax invoice |
A written or electronic document where the occurrence of a taxable supply is recorded |
Tax credit note |
A written or electronic document where the occurrence of any amendment to a taxable supply, that reduces or cancels the same is recorded |
Tax period |
A period for which the tax payable needs to be calculated. Tax periods are usually monthly, quarterly and annually. |
Tax return |
Statement to be prepared and submitted by a taxable person for a tax period. It contains the details of sales, purchases, output tax, input tax, tax payable, etc. |
Read more on Bahrain VAT
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