Bahrain Guide: How are records maintained for VAT?
Record maintenance is the type of records to be maintained for VAT purposes. VAT in Bahrain also includes the length of time records must be retained.
What documents are required?
- A taxable person or its tax representative is required to retain the following documents:
- Accounting books related to the taxable person’s transactions in chronological order
- Records of all supplies and imports of goods and services, including all tax invoices, and alternative documents received and issued, and
- Records of all supplies and imports of goods and services, all tax credit/debit notes, and alternative documents received and issued
- Balance sheet and profit and loss accounts
- Wage and salary records
- Fixed assets records
- Inventory records and statements
- All documents related to import and export
It is ideal to keep records of the following:
- Records of goods and services that have been disposed of or used for non-business purposes
- Records of goods and services purchased in respect of which input tax was not recoverable
- Records of any deemed supplies
- Records of corrections of errors
What are the languages for record-keeping?
VAT records in Bahrain are maintained either in Arabic or English. During a verification, review, audit, or appeal, the NBR may request the taxable person to translate into Arabic some or all of the records maintained in another language than Arabic or English.
How must records be kept and in what format?
Taxable persons in Bahrain must keep their documents and records in good condition and free from any damage. The documents may be kept electronically, subject to the following conditions:
- They can be easily accessed from the computer system when requested by the NBR.
- The hard copies of the documentation that support these books and records are available.
- The computer system has sufficient security to ensure the documents cannot be tampered with or manipulated.
How long records should be kept?
- A taxable person in Bahrain must maintain the relevant records for five years (15 years in the case of real estate) after the end of the tax period or when the adjustment period ends (for capital assets).
- The NBR may notify the taxable person to retain these records for an extended period, without this additional period exceeding five years.
- A taxable person that transfers his business or merges is required to retain the records related to the VAT in Bahrain.
- A taxable person in Bahrain that is declared bankrupt or in the event of insolvency, the taxable person’s legal representative must retain records of such a person for not less than 12 months from the date of finalizing the proceedings.
- Customs declarations for imports.
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