Businesses registered under Bahrain VAT have a compliance obligation to maintain books of accounts and records. The Bahrain VAT regulations outline specific types of records to be kept and the duration for which they must be retained.
This article delves into the various types of records to be maintained and their retention periods.
Record Maintenance and Accounting Books
The following records and books, as stipulated in the Bahrain VAT regulations, must be maintained by VAT-registered businesses:
1. Accounting books related to the chronological and numerical order of all transactions conducted by the Taxable Person.
2. Balance sheets and profit and loss accounts.
3. Records of salaries and wages.
4. Records of fixed assets.
5. Inventory records and accounts, including quantities and values at the end of each relevant tax period.
6. Copies of tax invoices, credit notes, and debit notes issued, as well as original tax invoices received by the taxable person.
7. All customs documents pertaining to import and export transactions carried out by the taxable person.
8. Additional records as determined by the Bureau.
These records should be securely stored to prevent damage and must be kept in a readable and reviewable state.
Retention Period for Records and Accounting Books
Taxable persons are required to retain records and accounting books for five years from the end of the tax period to which they pertain. For example, a tax invoice for a supply on 25th April ’19, relevant to the tax period of January-December ’19, must be retained until 31st December ’24.
Records related to capital assets should be kept for five years from the end of the tax period in which the adjustment period for such assets concludes. Similarly, records related to real estate should be retained for fifteen years from the end of the relevant tax period.
Electronic Retention of Records and Accounting Books
Taxable persons can choose to maintain records and accounting books electronically if they meet the following conditions:
1. Ensure easy access and extraction of records and accounting books from the computer system upon the Bureau’s request.
2. Have the ability to keep supporting documents both electronically and in hard copy.
3. Maintain records and accounting books securely to prevent tampering or manipulation.
4. Allow the Bureau to review the computer system or accounting software used to ensure compliance with the law and regulations.
Language of Records and Accounting Books
Records, accounting books, and other required documentation can be maintained in either Arabic or English.
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