Non- resident selling to non-resident

Non-Residents (with no fixed place of business or fixed establishment) are required to register for VAT within 30 days from the first taxable supply to non-taxable persons in Bahrain, regardless of the registration threshold limit.

Non- resident selling to resident

Non-Residents (with no fixed place of business or fixed establishment) supplying goods and services to taxable persons in Bahrain, are not required to register. In turn, the taxable persons in Bahrain receiving those goods and services have to report the VAT due under the reverse charge mechanism in their VAT return.

What is Fixed place of business?

The place where a business is legally established, or where its actual management centre is located where key business decisions are made if different from the place of establishment.

What is Fixed Establishment?

Any fixed location for a Business other than the Place of Business, in which the business is carried out and is distinguished by the permanent presence of human and technical resources in such a way as to enable the Person to Supply or receive Goods or Services.

How to appointment a tax representative?

Non-Resident taxable persons can apply for registration with the NBR either directly or by appointing a Tax Representative to act on their behalf.

Tax Representative is a Person licensed by the Tax Bureau to represent the Non-Resident Taxable Person for all matters related to his commitment and its Tax rights.

  1. The Bureau has the right to license willing Persons to act as Tax Representatives or Tax Agents after the payment of the fees approved for the license.
  2. The Bureau shall issue the names of the Persons approved to be Tax Agents or representatives.
  3. The Tax Representative along with the Taxable Person shall be liable for the payment of any Tax until the date when the Bureau announces that he is not representing the Taxable Person.
  4. The Taxable Person is still personally liable to the Bureau on his various Tax commitments despite appointing a Tax Agent.
  5. The Person that has been appointed as an administrator, Personal representative, executor, legal guardian or clearance officer has to notify the Bureau within 30 days of the date of being appointed.

Conditions for qualifying as a Tax representative

The Tax Representative or Tax Agent applicant must fulfil the following conditions:

  • He must be resident in the Kingdom.
  • He must be a Person of good conduct and reputation and must never have been sentenced to a restriction of freedom in a crime against honour.
  • Where the applicant is a natural Person, he should possess at least a university degree or an accounting or legal qualification, which shall be certified and approved by the Ministry of Education.
  • Where the applicant is a legal Person, he should carry out his activity under a valid and current commercial registration.
  • He must pay the fee prescribed by Bureau.
  • He must be appointed under an official power of attorney to act in the name of the registrant in respect of all Tax obligations in the Kingdom.

Appointing a Tax Representative

  1. A Non-Resident Person obliged to register in the Kingdom may appoint a Tax Representative in the Kingdom, who is licensed by the Bureau, by an application submitted to the Bureau on a form prepared for this purpose.
  2. The Tax Representative shall meet the conditions stipulated and the Bureau shall issue its decision on the application for appointment within thirty days from the date of the submission of the application.
  3. The Tax Representative shall be jointly liable with the Taxable Person for all Tax obligations of the latter, and shall replace him in the relationship with the Bureau from the date the Bureau approved his appointment as Tax Representative.
  4. The Bureau shall be entitled to pursue the Tax Representative by legal means to collect Tax due by the Non-Resident Person.
  5. Where the Tax representation has terminated because the Non-Resident Person ceased to carry out his activity in the Kingdom, the appointment of another Tax Representative, the termination of the representation term or any other reason, the Tax Representative shall remain subject to the obligations in the Law with respect to transactions made during the period of his legal representation until the date of termination.
  6. If the Bureau approves the licensing of the Tax Representative, a unique Tax Registration Number shall be assigned to him as a Tax Representative which differs from his Tax Registration Number as a Taxable Person. Where the application is rejected, the applicant shall be notified of the rejection of his application together with the reasons for the refusal.

The NBR reserves the right to request and obtain necessary documentation from the taxable entity to prove that the above requirements are met.

Documents for registration

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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