Value Added Tax (VAT) Payment Process in Bahrain

In Bahrain, all businesses registered for VAT must collect a 5% VAT on taxable goods or services they supply. The collected VAT from customers must be remitted to the National Bureau for Taxation (NBT). This article will provide insights into the VAT payment deadlines and the method for calculating VAT payments.

**VAT Payment Deadline**

VAT payments in Bahrain must be made alongside the VAT return. A taxable person is required to submit their tax return through the NBR’s online portal and make the VAT payment by the final day of the month following the conclusion of the tax period.

For instance, for the tax period of January to March 2019, the VAT return and payment are due by April 30, 2019. Timely payment to ensure it reaches the NBR on the stipulated day is essential. Even if there are no transactions to report in a specific tax period, a taxable person must still submit a nil return, indicating no output or input tax and, consequently, no VAT payment.

**Calculating VAT Payments**

Being a VAT-registered business doesn’t mean you have to remit the entire VAT amount collected from sales. The law prescribes a specific method to determine the VAT payable to the government. The formula to calculate VAT payments is as follows:

Value Added Tax Payment can be calculated as the difference between Output VAT and Input VAT.

To calculate your VAT payment, you need to ascertain the total Output VAT collected during the tax period and the total Input VAT you are eligible to recover. Once you have these figures, apply the formula.

If your Output VAT exceeds your Input VAT, the difference represents the VAT payable. If your Output VAT is less than your Input VAT, it results in a refund, and thus, no VAT is payable.

**Example of VAT Payment**

Let’s consider an example using Rose General Stores:

– Output VAT: BHD 300,000
– Input VAT: BHD 200,000

Rose General Stores’ VAT payment is determined by the following calculation:

Output VAT (BHD 300,000) – Input VAT (BHD 200,000) = BHD 100,000, which is the VAT payable to the government. This amount must be remitted accordingly.

You can also Register for VAT Registration on our website:

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