VAT Payment in Bahrain

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Yarab A, Jan-31-2020

All the businesses registered under Bahrain VAT are responsible to collect VAT at 5% on the supply of taxable goods or services. The VAT so collected from the customers should be paid by the supplier to the Nation Bureau for Taxation (NBT). In this article, we will discuss about VAT Payment Due date and Method to calculate the VAT payment.

VAT Payment Due Date

VAT payment in Bahrain VAT should be accompanied by the VAT return. A taxable person should submit a tax return using the NBR’s online portal and make the payment of the VAT due by the last day of the month following the end of the tax period.

For example, for tax period Jan-Mar 2019, VAT return along with payment of VAT should be made by 30th April,2019.

Also, the taxable persons should ensure that payments are made in proper time for it to be received by the NBR on that day. If there are no transactions to be reported in a given tax period, a taxable person should still submit a nil return showing no output or input tax and subsequently no VAT payment.

VAT Payment Calculations

While the VAT registered businesses are required to pay the VAT, it doesn’t imply that one has to pay the entire amount of VAT collected on sales. The law has prescribed the method to arrive or determine the VAT payable to the government.

The following is the formula to arrive the VAT payment to the government.

VAT Payment = Output VAT – (minus) Input VAT

All you need to do here is to calculate your total Output VAT collected during the tax period and total Input VAT which you are eligible to recover. Once you have determined the Output VAT and Input VAT, apply the above formula.

If your output VAT is more than the input VAT, the difference will be the VAT payable. If output VAT less than the Input VAT, it will result in refundable and therefore, no VAT payable.

Example of VAT Payment,

The Output VAT and Input VAT of Rose General Stores is given below

Output VAT

BHD 300,000

Input VAT

BHD 200,000

The VAT payment of Rose General Stores is determined by adjusting the Output VAT with Input VAT as shown below:

Output VAT BHD 300,000 – (Minus) Input VAT BHD 200,000 = BHD 100,000 is VAT payable which need to be paid to the government.