Bahrain Guide: How to Appeal VAT Penalties?

As the Kingdom of Bahrain has launched the new VAT law, individuals failing to meet the settlement require considering penalties. If a taxpayer in Bahrain fails at agreeing with the authority’s decision, they appear for tax dispute settlement to the court. For this reason, it is important to understand the facts and facets concerning VAT Penalties in Bahrain.

Businesses registered under the Bahrain VAT shall adhere to provisions of the VAT law from applying for the registration of VAT to the filing of its return. Slippage in meeting these requirements as offered in the VAT Law and regulations may bring hefty administrative penalties.

According to the Bahrain VAT law, it imposes multiple administrative penalties on the basis of the type of non-compliance act committed by taxpayers. The following are the many administrative penalties.

Outlining the Administrative Penalties

As described above, the Bahrain VAT law includes different administrative penalties. You can find a comprehensive narration about it in the following pointers.

• Failing at registering with the NBR within a total of 60 days of the registration deadline (the taxpayer gets fined a whopping amount of BHD 10,000 or more)
• Filing the delayed VAT return or lately paying the VAT amount (not exceeding the 60-day limitation) (taxpayer gets fined 5-25% of the total value of their tax amount)
• Submitting untrue information about supplies and imports (where their actual value is higher than the declared value in their tax return) (the taxpayer gets fined 2.5-5% of the total unpaid tax amount each month)

Taxpayers who have got involved in the violations (mentioned below) will get fined around BHD 5000:

• Obstructing NBR authorities from carrying their duties
• Failure at displaying the total prices of services and goods all inclusive of the VAT rate
• Not notifying NBR about the changes made for submitting the application for VAT registration or the VAT return in Bahrain
• Violating other provisions of VAT laws laid down by NBR
• Failing at getting abided by rules involved in issuing the VAT invoice
• Not providing information as requested by NBR

Steps to Appeal on Administrative VAT Penalties in Bahrain

The following are the steps that you need to consider when it comes to appealing to the administrative VAT penalties in Bahrain.

Step 1: As a taxpayer, you can appeal the administrative penalty imposed on them within a total of 30 days from the notificationdate.

Step 2: For this reason, you should file the objection with the Tax Appeal Review Committee.

Step 3: As the Committee submits the recommendation letter to the authorized delegate or the Minister within 30 days, you must wait.

Step 4: The Minister or the authorized delegate must be given a period of 15 days to provide the decision on such a matter.

In this process, you can apply for the application for the penalty for late VAT returns in Bahrain.

Summing up

If taxpayers commit tax evasion, they get penalized in different ways, including 3-5 years imprisonment, double fine value, and more. So, one should always opt for the steps to appeal VAT penalties and stay on a safer side.

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