The appointment of a fiscal representative for non-resident companies is mandatory in Bahrain, and optional for other businesses and people supplying VAT-taxable goods and services. The National Bureau of Revenue (NBR) is in charge of the authorization of such representatives. Below, our company formation agents in Bahrain have created a guide on the appointment of a VAT or tax agent. You can also count on us for such a service.
| Quick Facts | |
|---|---|
| Requirement to appoint a fiscal representative in Bahrain (YES/NO) | Yes, the appointment of such an agent is mandatory for non-resident enterprises. |
| Types of businesses that can appoint a fiscal agent | Local and foreign companies (for the latter, such an agent is required). |
| Possibility to appoint a fiscal agent by sole traders (YES/NO) | Yes, sole traders can also appoint fiscal representatives. |
| Who can act as a fiscal agent in Bahrain? | Accountants and accounting firms |
| Registration requirement for a tax agent (YES/NO) | Yes, with the National Bureau of Revenue |
| Availability of VAT registration services through a fiscal agent (YES/NO) | Yes |
| VAT reporting services availability (YES/NO) | Yes, this is one of the main services provided by a fiscal representative. |
| Availability of VAT filing services (YES/NO) | Yes |
| Record-keeping services | Yes, a fiscal agent can maintain VAT and tax files. |
| VAT control support (YES/NO) | Yes, Bahraini fiscal agents can ensure VAT control. |
| VAT refund assistance (YES/NO) | Yes, for clients dealing with foreign tourists. |
| Import-export procedure representation availability (YES/NO) | Yes, a fiscal representative can also administer import-export documents and procedures. |
| Tax registration support (YES/NO) | Yes, this procedure can be handled by such an agent on request. |
| Why appoint a fiscal agent in Bahrain? |
– VAT compliance ensurance, – tax penalties avoidance, – tax regulations compliance. |
| Availability of fiscal representation services with our accountants (YES/NO) | Yes, clients can rely on our accountants for tax representation in Bahrain. |
Table of Contents
Services provided by a fiscal representative in Bahrain
A fiscal representative is also known as a VAT agent, as this is usually a person/entity who has been granted permission by the NBR to represent a taxable party with regard to the tax and VAT obligations to the NBR.
Among the services provided by a Bahraini tax agent are:
- registering for VAT;
- preparing and submitting VAT returns to the NBR;
- filing VAT appeals and reconsideration requests to the NBR on behalf of the taxable person;
- making various types of inquiries to the NBR on behalf of the taxable person.
A taxable person with residency in Bahrain may choose to designate a VAT agent to handle his VAT duties on his behalf. However, this is an optional service.
Our lawyers in Bahrain are at your disposal if you want to incorporate a company in Bahrain and register it for tax and VAT.
Who can provide fiscal representation services in Bahrain?
Both natural and legal persons may apply to become VAT agents or representatives in line with the Bahrain VAT legislation, provided they fulfill all of the requirements listed below:
- they must be residents of Bahrain;
- they must be persons of good moral character and reputation who have never been convicted of a crime against honor or had their freedom restricted;
- in the case of natural persons, they must be individuals with a university degree, accounting degree, or legal qualification that have been verified and approved by the Ministry of Education;
- a legal person (partnership/company) must carry out the proposed VAT agency/ representative services under a current, authorized commercial registration.
A certificate and a special VAT registration number will be issued to the approved VAT agent or representative, and the authorization is valid for 3 years and can be renewed.
A VAT representative will be the NBR’s initial point of contact for any queries or audits, and he or she will be equally accountable with the taxable person who appointed him for payment of any VAT (including penalties) owed to the NBR.
Feel free to address our Bahraini company formation agents if you need information on the appointment of a fiscal representative.
Fiscal representation for digital service providers in Bahrain
Upon the introduction of the VAT, e-commerce companies also became liable for registration and payment of this tax. Considering the market is also open for foreign businesses, appointing a fiscal representative in Bahrain can be useful, even though it is not mandatory.
The services of such an agent are important, as these companies are subject to specific VAT requirements. One of the most important is the registration procedure. Specifically, if for traditional businesses, the registration threshold is BHD 37,000 per year, for digital service providers, the minimum amount is BHD 18,850 per year. However, they can also benefit from a simple registration procedure by filing for VAT numbers voluntarily.
Simple VAT registration in Bahrain means the company cannot deduct the VAT payments. This is why asking for local support from a Bahraini fiscal agent can be of help in determining the best option for the foreign business.
This is also the case of e-commerce companies, for which the main applicable condition to complete VAT registration is within a month of starting the sales.
You can also rely on our accountants in Bahrain for detailed information on the requirements applicable to digital service providers.
How is the fiscal agent appointed?
Appointing a fiscal representative in Bahrain is not complicated. The most important step is choosing an approved accountant or accounting firm and issuing them a power of attorney where the responsibility of the agent is clearly defined. Our lawyers in Bahrain can assist with the creation of this document.
The power of attorney must be filed with the National Bureau of Revenue upon registration for VAT. It is also important to note that the power of attorney can also be used for representation in other fiscal matters. All you need to do is specify them in the document. With respect to its validity, you can opt for a limited one (in which you must write the end date), or a general one, which can have unlimited duration.
A fiscal agent can help you avoid tax penalties
Failing to comply with the tax legislation will attract the payment of fines or other penalties. This is why not only foreign but also local businesses choose to appoint fiscal agents in Bahrain: to ensure financial compliance.
Here are the main penalties associated with tax obligations:
- late VAT return submission and/or payment implies a fine of 5% to 25% of the value of the tax;
- failing to notify the tax authorities about VAT registration or VAT return information may result in a BHD 5,000 (USD 13,295) fine;
- the same penalty is imposed for not displaying prices that include the VAT, for not providing data requested by the tax authorities, or for not respecting the invoice issuing conditions under the VAT Law.
VAT returns filing requirements in Bahrain
Here is the calendar for filing VAT returns in Bahrain:
- monthly for companies with taxable revenue of at least BHD 3 million (approx. USD 797,700) annually;
- quarterly for companies with annual taxable revenue of less than BHD 3 million;
- annually for entities with taxable turnover less than BHD 100,000 (approx. USD 26,590), however, this is an option, as such businesses can also choose to file quarterly or monthly returns.
If you need a fiscal representative in Bahrain, do not hesitate to contact our local agents. You can also rely on us for immigration services in Bahrain.