GCC Indirect Tax Weekly Digest

Bahrain developments

NBR reveals Bahrain VAT return format

The Bahrain National Bureau for Revenue (NBR) has revealed the format of the Bahrain Value Added Tax (VAT) return in a closed meeting with VAT consultants.

While broadly similar to the format of the VAT return in the Kingdom of Saudi Arabia (KSA), the key differences are as follows:

• The VAT return includes the field for supplies to registered customers in other GCC countries which will temporarily be deactivated, until the intra-GCC rules take effect;
• The field for the supplies subject to domestic reverse charge mechanism was added;
• Import of goods subject to VAT paid at customs or deferred will be reported in the same field, which as we were advised, will auto-populate, based on whether the taxpayer has approval to defer the payment of import VAT.
• In addition to zero-rated and exempt purchases, purchases from non-registered taxpayers must also be reported. This is a slightly unusual requirement insofar as VAT regimes go, but given the profile of the Bahrain market, it is seemingly there to help the NBR to monitor compliance amongst smaller businesses.

The VAT return format is expected to formally be released soon, along with guides on VAT returns/payments and non-resident registration.

NBR publishes imports and exports VAT guide

The NBR has published its VAT guide on imports and exports. The guide addresses the applicability of VAT on the import and export of goods and services into/from Bahrain.

The guide (which is not legally binding) provides some insights into the likely approach of the NBR on the VAT treatment, place of supply, liability for payment, VAT recovery, and documentation requirements that any business importing into/exporting from Bahrain is subject to.

Deloitte has recently published an alert with a more detailed overview of the guide.

There are many complexities and special rules in the Bahrain VAT legislation which apply to only certain types of import and export transactions. It is very important that businesses with any import/export activity into/from Bahrain ensure that they are fully aware of and compliant with the legislation.

KSA GAZT publications

The KSA General Authority of Zakat and Tax (GAZT) has published the English versions of several VAT guides previously published in Arabic.

Professional services guide (English)

This guide covers topics including the place of supply of professional services, the due date of VAT on professional services, common issues such as disbursements and expenses and later adjustments, the treatment of professional events and seminars held in KSA, financial advisory services, global contracting, and the treatment of intercompany charges.

Telecommunications guide (English)

This guide provides further clarity to suppliers of telecommunications services in KSA. The guide includes details on the supplies that are considered telecommunications services and the VAT treatment of goods and services sold in combination.

Further, the place of supply of telecommunications services and the treatment of vouchers and promotions are also addressed.

Recreation and entertainment guide (English)

This guide covers topics relevant to suppliers of recreation and entertainment services, including place of supply rules, the treatment of admission fees, and the VAT liability of supplies made by hotels, restaurants and catering services.

The guide also addresses special cases, such as sports clubs, membership fees, contract agreements, and advertising/sponsorships.

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.