A resident taxable person in Bahrain must register for Value Added Tax once the value of its annual supplies exceeds the mandatory registration threshold of 37,500 Bahraini dinars, whether this has actually occurred over the preceding twelve months or is expected within the coming twelve months. Voluntary registration is also available to a person whose supplies or expenses reach half of this threshold.

The Two Cases of Mandatory Registration

Article (29) of the Value Added Tax Law sets out two cases in which a resident taxable person becomes obliged to register, stating:

A resident Taxable Person shall be obliged to register for tax purposes in either of the following two cases: 1- If the value of supply transactions carried out in the Kingdom during the twelve months preceding the end of any month during the year exceeds the Mandatory Registration Threshold.

The article adds a second case: an expectation that the value of supplies will exceed the mandatory registration threshold during the coming twelve months. A non-resident person liable to pay tax in the Kingdom must register regardless of the value of its supplies, either directly or through a tax representative.

The Value of the Mandatory Registration Threshold

Article (33) of the Value Added Tax Law's Executive Regulation fixes the mandatory registration threshold, stating:

The mandatory registration threshold shall be thirty-seven thousand five hundred dinars.

In other words, the mandatory registration threshold is equivalent to 37,500 Bahraini dinars of actual or expected taxable supplies, as also confirmed by the official English translation of the National Bureau of Revenue's registration-phases decision: "the mandatory registration limit equivalent to thirty-seven thousand five hundred dinars (37,500)".

Deadlines for Submitting the Registration Application

Under the same article, a person obliged to register must apply to the National Bureau of Revenue within thirty days of the last day of the month in which its supplies exceeded the mandatory registration threshold, or within the thirty days preceding the month in which the threshold is expected to be exceeded. If a taxable person fails to register within these deadlines, the Bureau may register it automatically from the date its supplies reached the mandatory threshold, and it remains liable for the tax due on its supplies from that date.

Voluntary Registration

Article (33) of the Value Added Tax Law allows a person whose supplies do not reach the mandatory registration threshold to apply for voluntary registration if its supplies or expenses reach the voluntary registration threshold. Clause Three of Article (51) of the GCC Unified Value Added Tax Agreement, ratified by Legislative Decree No. (47) of 2018, fixes the relationship between the two thresholds:

The voluntary registration threshold shall be 50% of the mandatory registration threshold.

Illustrative Example

Applying this percentage to the mandatory registration threshold of 37,500 Bahraini dinars gives an approximate voluntary registration threshold of 37,500 × 50% = 18,750 Bahraini dinars (illustrative example based on the percentage set out in the Agreement), matching the amount the Executive Regulation states explicitly in words as eighteen thousand seven hundred and fifty dinars.

Legal References

For questions about your specific situation, you can ask the Bahrain Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.