Bahrain: Penalties applied to unregistered businesses charging VAT on supplies
It is critical for newly setup businesses to evaluate whether they are required to apply for VAT registration.
Penalties applied to unregistered businesses charging VAT on supplies
Certain newly set up businesses have been penalized— up to BHD 5,000—by the National Bureau for Revenue (NBR) for charging value added tax (VAT) on supply of goods or services prior to obtaining VAT registration.
Newly set up businesses may have accounting systems configured, by default, to apply VAT on sales transactions even without a valid VAT registration.
It is critical for newly setup businesses to evaluate whether they are required to apply for VAT registration in the initial stages of planning their setting up. Further, due care must be taken that no VAT is charged on sales by any business/individual without a valid VAT registration in place.
Read an April 2023 report [PDF 105 KB] prepared by the KPMG member firm in Bahrain
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