MANAMA: Business dynamics and dimensions are moving very swiftly those organizations who don’t have appropriate systems such as Enterprise Resource Planning (ERP) falls not only behind, they even create a Grey Area for the Govt. Agencies in terms of transparency and accountability, since Value Added Tax (VAT) has already been started in GCC (KSA, UAE and now BAH from 2019), it’s high time that organizations structures need to be accessed, gone are those days when the business owners or managers deliberate DON’T WANT, their businesses to be monitored or checked, with the inclusion of VAT in GCC, NO businesses should be handled without having proper books of accounts, if the targets of govt. need to be achieved for meeting the budgets etc, there need to be a TOP DOWN approach.
VAT is based on Revenue or Sales, the minimum amount is US$100,000/- (BHD 37,500/-), this is mandatory threshold for registration for any type and size of organizations, the exception may be some industries and depends on the framework for each GCC country, like KSA and UAE have no exceptions, however health care, oil and gas, basic education as well as some food items etc. are exempt from the VAT in BAH, all GCC countries must apply VAT as signed unified agreement in 2018, sooner or later all countries must apply in their respective countries.
VAT is indirect taxation, ultimately beard by the consumers and the businesses just work as collection agents from each organization in the whole supply chain, the govt. devised the mechanism of VAT by making the framework and regulations with online portal for VAT filing etc
Lets explain more about VAT and related issues.
What is VAT?
Value Added Tax (VAT) is an indirect tax, applied on each supply chain and to be paid ultimately by the consumers on Goods/Services.
Businesses are collecting and ultimately liable to pay the government.
Why VAT?
VAT is a form of revenue to be received by the government and utilized on the public services such as roads, education, health-care and other infrastructure of the country.
How to prepare for VAT?
Business need to adopt systems which can record and report VAT on timely basis thus enabling govt. to speed-up the collection and filling process in case of Bahrain, National Bureau of Revenue (NBR).
Systems can be in form of an Accounting Solution or ERP ensuring are compatible with VAT compliance.
When to prepare for VAT?
Any type or size of the organisation having revenue or turnover in BHD.
A) 5,000,000 or above Dec 2018.
B) 500,000 or above June 2019.
C) 37,500 or above Dec 2019.
D)18,750 minimum can register anytime.
Note: Starting from 2020, any business BHD 3,000,000 need to submit monthly VAT returns.
Penalties:
There are various penalties for non-compliance that may be due to lack of knowledge (unintentional) or deliberate (intentional), leads to imprisonment (upto 3 years) for tax evasion, financial penalties are BHD 5,000/-, 10,000/- or percentage of revenue, subject to NBR.
About DanOwa:
We at DanOwa Group having several years of Multinational experience and expertise, are the pioneers of industrial revolution and advocates the necessity of having systems even for Micro to SME’s. We would like to extend our co-operation and support to implement flawless systems and parameters to create a dynamic business environment with the focus on Corporate Governance and Adherence to the laws and business ethics.
We can cover all types of industries from Trading to Manufacturing as well as Service, Large Enterprises also avail the opportunity if using SAP since we have specialized solution for VAT.
Why to buy unknown products with no product support, if you can get a branded solution covering all your business requirements. Contact sales@danowagroup.com
Visit our website www.dovat.danowagroup.com for VAT requirements.
Also our group website www.danowagroup.com
Note: Kind reminder on VAT:
Businesses generating BHD 37,500/- Annual Sales/Revenue, or more, should register to get VAT Certificate (TRN) by Dec 20th, 2019. Also if you are having BHD 18,750/- Annual Sales, can register anytime. Please contact 36683371 or dovat@danowagroup.com
