The Bahrain National Bureau for Revenue (NBR) had published two new VAT Guides on its website. Here is a brief summary of each.
The Economic Activity Guide specifies that to register for VAT in Bahrain, a person must undertake an economic activity. Bahrain’s VAT law defines the term ‘economic activity’ and this Guide provides examples of economic activities for VAT purposes and the relevant indicators in respect of the same. For example, the Guide specifies indicators such as regularity of activities, quantum or financing of activities, and so on, for determining whether or not a person is conducting an economic activity.
The Transfer of a Going Concern Guide highlights the VAT implications of a person (the transferor) transferring his or her economic activity to another person (the transferee). The Guide sets out conditions related to when the transfer of a business meets the criterion of a going concern and when a transaction will be outside the scope of VAT.
It is an important update because the conditions and considerations that businesses must satisfy to be a qualifying transfer of a going concern (‘qualifying TOGC’) have been clearly spelled out, along with the input tax recovery details and the business records that must be maintained.