GCC Indirect Tax Weekly Digest

Bahrain NBR reveals VAT return format

The Bahrain National Bureau for Revenue (NBR) has revealed the format of the Bahrain Value Added Tax (VAT) return on its website.

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 suppliers 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.

Oman income tax executive regulations amended

The Oman tax authorities recently issued amendments to the existing Executive Regulations under the Income Tax Law with Ministerial Decision 14/2019.

The amendments aim to provide clarity on certain key issues, including deductibility of donations-in-kind, salaries and wages to partners/shareholders, and the applicability of Withholding Tax (WHT) on cross border transactions.

While the amendments to the Executive Regulations are primarily focused on the treatment of such transactions from an income tax perspective, the regulations may also be a good reference point to analyze similar transactions from a VAT perspective.

The regulations and their amendments may give an indication of the likely future VAT treatment of such transactions.

For businesses that are likely to be impacted by these regulations, this is an opportunity to plan ahead and consider the possible future VAT implications.

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.