Frequently Asked Questions - Bahrain VAT
What is VAT?
VAT is the abbreviation of Value Added Tax and is in general due when goods and/or services are sold. It is generally chargeable on all taxable goods and services supplied in Bahrain. It is a consumption tax because it is ultimately borne by the final consumer.
Who must pay VAT?
Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.
Where a foreign organization (such as Zoom) provides electronically supplied services to customers that are not registered for VAT in Bahrain, there is a requirement for Zoom to charge and collect VAT on these supplies and remit the VAT to the National Bureau for Revenue (“NBR”)..
If you are a business customer, you should provide your Bahraini VAT Account Number to Zoom. If the VAT number is valid then no VAT will be charged on the supplies made to you by Zoom. However, you may be required to declare and pay VAT under the “reverse charge” mechanism in your VAT return.
Why am I being charged VAT?
Video conferencing services and telecommunication supplied by Zoom fall within the VAT on e-commerce rules concerning electronically supplied services by non-resident service providers to non-VAT registered customers in Bahrain.
If you are VAT registered in Bahrain, you should provide your VAT Account Number (VAT ID) to Zoom, see ‘How do I enter my VAT Account Number?’ below for details on how to do this. If the VAT Account Number is valid, then no VAT will be charged on the supplies made to you by Zoom. If you do not have a valid VAT Account Number, then VAT will be charged on the supplies made to you by Zoom.
What is a VAT Account Number?
A VAT Account Number is a unique number issued by the National Bureau for Revenue to registered taxpayers in Bahrain.
Does Zoom have a VAT Account Number?
Yes. Zoom’s VAT Account Number will be shown on the invoice it issues to you.
How do I enter my VAT Account Number?
To provide your VAT Account Number, please complete the following steps:
- Sign in to the Zoom web portal.
- In the navigation menu, click Account Management, then Billing.
- Click the Billing Information tab.
- Under Sold to Contact, choose to edit the VAT/VAT ID number (which appears after the Sold to Contact Address field).
- Enter your VAT ID and click Save.
You are required to notify us if there is a change to your VAT registration status.
How is Zoom determining which customers VAT applies to?
Zoom applies the rules and regulations from the Executive Regulations of the Value Added Tax Law. If a customer's ‘Sold To’ location is in Bahrain, and the customer has not provided a valid Bahrain VAT Account Number, Zoom will charge VAT on its invoices.
Is there a minimum threshold purchase amount before VAT is applied?
No, where a customer in Bahrain has not provided a valid Bahrain VAT Account Number, Zoom will charge VAT on all supplies made to you.
Are there any special exemptions applicable for charities or other business organizations under which VAT may not be charged?
There are no VAT exemptions applicable to non-profit organizations or international agencies in Bahrain.
Are there any VAT obligations for me as a customer?
If you have provided a valid VAT Account Number to Zoom, no VAT will be charged on the supplies made to you. However, you may be required to declare and pay VAT under the “reverse charge” mechanism in your VAT return.
There is no VAT obligation, in relation to the services supplied by Zoom, for a customer who is not registered for VAT in Bahrain. However, Zoom will charge VAT on its supplies to you.
What if I have a VAT Account Number and forget to enter it?
The VAT Account Number can be entered at any time. If entered before the next invoice, Zoom will not charge VAT on the next invoice or future invoices issued to you. If no VAT Account Number is entered at the time the next invoice is issued, VAT will be charged until a valid VAT Account Number is entered.
If a valid VAT Account Number is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund any VAT included on invoices issued in the thirty days prior to a valid VAT Account Number being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.
Decision tree – My “Sold To” address is Bahrain, will I be charged VAT?
Every customer is unique and so are their specific tax circumstances. The above-stated information should not be considered as tax advice, but as a general overview of relevant tax rules in Bahrain. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.
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