How to record UAE VAT on Services sold to customers in KSA and Bahrain?
The GCC member states of the UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait have signed a common VAT agreement. Article 9 of this agreement set out how taxation on sales between these member states should be treated.
It says that if a taxable person in a member state receives taxable goods or services from a resident in another member state, then he shall be deemed to have supplied these goods or services to himself and the supply is taxable in accordance with the Reverse Charge Mechanism (RCM). Read more…
How should businesses register?
To register for VAT, taxpayers must first create NBR profile.
1. The taxpayer is required to populate the NBR form and specify their information including:
2. Taxpayer details (Legal name, Legal form, Address, contact details, VAT eligibility date etc.)
3. The taxpayer submits the profile creation request. This NBR profile can be created online using the following link.
4. If taxpayer’s NBR profile is approved, they will be provided with login details to access the registration form.
5. The registration form can be completed in a “single click”. This registration form can be accessed using the following link.
6. Once the submission is reviewed and approved by NBR, The VAT certificate will be available on the taxpayer’s NBR profile.
Which businesses should register?
Registration will follow a phased process whereby companies within specific annual supply brackets are required to register by specific dates.
VAT registration phasing and thresholds
All entities generating over BHD 18,750 in annual supplies are eligible for voluntary registration.
Registration of Non-Residents in Bahrain
Non-Residents (with no fixed place of business1 or fixed establishment2) are required to register for VAT within 30 days from the first taxable supply to non-taxable persons in Bahrain, regardless of the thresholds mentioned above.
Non-Residents (with no fixed place of business1 or fixed establishment2) supplying goods and services to taxable persons in Bahrain, are not required to register. In turn, the taxable persons in Bahrain receiving those goods and services have to report the VAT due under the reverse charge mechanism3 in their VAT return.
Non-Resident taxable persons can apply for registration with the NBR either directly or by appointing a Tax Representative to act on their behalf.
The NBR reserves the right to request and obtain necessary documentation from the taxable entity to prove that the above requirements are met.