The seminar, conducted by Mr. Craig Richardson, Partner and Head of Tax and Corporate Services at KPMG in Bahrain began with an overview about the implementation of VAT in Gulf Cooperation Council (GCC) countries, including Bahrain. The one-day event also showcased how VAT will impact all businesses in Bahrain across the various economic sectors, either directly or indirectly, including listed companies in particular.
During his presentation, Mr. Richardson outlined the steps that listed companies should take today to be VAT ready once the new tax is implemented in the Kingdom of Bahrain by mid-2018.
Mr. Richardson clarified that VAT will affect the sales of goods and services in Bahrain with limited exemptions and consumption tax relief. However, there will be a right for businesses to claim a credit for VAT paid on their input relating to their business activities.
As outlined by various member states, GCC countries will introduce VAT at a 5% rate as part of wider development reforms. GCC countries have had regular discussions over the last several months to formulate and finalize the main principles under which VAT will be implemented; most GCC countries are expected to officially ratify the VAT Framework Agreement soon this year. Once the agreement is ratified, each country is required to issue its’ own domestic legislation to implement VAT, including Bahrain.