Guidance issued on VAT treatment of cryptocurrency transactions

Bahrain’s National Bureau for Revenue (NBR) published an updated version of the Financial Services VAT Guide on 1 January 2022, which clarifies the VAT treatment of cryptocurrency transactions.

Bahrain recognises four types of tokens and has indicated the VAT treatment, as follows:

The NBR has also updated the Imports and Exports VAT Guide in relation to the alternative documents that can be used for claiming an input tax credit. This clarification covers situations where a shipment contains goods for multiple customers of a clearing agent, and the customs declaration is issued in the name of the agent instead of the individual customers. In these circumstances, for purposes of reclaiming input VAT, the NBR will accept an alternative document issued by the clearing agent (on the agent’s letterhead and signed and stamped) that contains the following information:

Details of the VAT payer on whose behalf the agent imported the goods (including the name, address and VAT account number);
Details of the goods imported by the agent on behalf of the VAT payer;
Reference number of the customs document under which the import was made;
Date of the import;
Amount of VAT paid in respect of the goods imported; and
Statement confirming that the VAT amount has been paid to Bahrain Customs Affairs.

Vijay Chandra
vijay.n@bdo.com.om

Ashish Athavale
ashish.athavale@bdo.ae