The Gulf state of Bahrain introduced Value Added Tax on 1 January 2019. This included VAT on electronic or digital services provider to consumer by non-resident providers. B2B transactions may be nil rated, with the Bahraini customer applying the reverse charge.
The compulsory VAT registration threshold in Bahrain is BHD 37,000 per annum. A voluntary registration for businesses below this threshold is permitted, although this has its own minimum threshold of BHD 18,850 per annum.
VAT registrations must be completed with the National Bureau of Taxation within one month of the commencement of sales. It is possible to apply for a simplified VAT registration for digital services, with no right to deduct any local VAT suffered.
Appointing a local tax agent is optional; there is no requirement to appoint a fiscal representative.
Electronic services are services provided over the internet or any electronic platform, and which operate in an automated manner with limited human intervention and which are impossible to complete without the use of information technology.
Electronic services include, but are not limited to, the following:
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