VAT FAQs

 

Introduction

The Kingdom of Bahrain (“the Kingdom”) has issued Decree Law No. (48) Promulgating the Value Added Tax ("VAT") Law (“the Law”)) on the 10th of October 2018. The Law outlines the application of VAT in the Kingdom of Bahrain and it consists of 79 Articles. The Law shall come into effect on 1 January 2019.

By Law, VAT is required to be charged by businesses that are registered for VAT on their taxable transactions. In general, the supplies of goods and services are taxable at the standard rate of 5% throughout the supply chain, unless the VAT Law specifically provides that such supplies are zero-rated or exempt.

VIVA is obligated to comply with the requirements of the Law and its Executive Regulations issued under decision (12) of 2018 by the Ministry of Finance and National Economy, which are regulating the VAT and its application in the Kingdom.

Accordingly, from 1st January 2019, the charges/ fees on products and services provided by VIVA shall be taxable pursuant to the provisions of the Law and its Executive Regulations.

 

General FAQs

VAT is a consumption tax that the end user is obligated to pay, and VIVA will only be acting as a collection agent on behalf of the Authorities. Both individual and business customers will be required to pay VAT on goods and services purchased from VIVA.

VAT will be introduced in the Kingdom on the 1st of January 2019.

VAT will be introduced in the Kingdom on the 1st of January 2019 at the Standard Rate of 5% on all goods and services unless the VAT Law specifically provides that such supplies are Zero-rated, Exempt or outside the scope of VAT.

The majority of Telecommunication goods and services fall within the Standard rate of 5%.

A 5% VAT will be added to the postpaid bills upon issuance of the bill.

VAT for prepaid is applicable at 5% when you use your prepaid credit balance regardless of when the recharge has been performed.

As per the VAT executive regulation, it is mandatory for all registered businesses to charge VAT on all goods and services offered. As of January, 1 2019, VIVA must charge VAT on all its products and services at the applicable rate.

VAT-registered businesses must submit VAT returns to the National Bureau for Taxation declaring all the amounts of VAT they have charged and the amount of VAT they have incurred in each tax period.

For further details, please visit https://www.nbt.gov.bh/FAQ

In accordance with the requirements set out in the Law and the Regulations, VIVA’s (“TRN”) will be included on its Tax Invoice.

For reference, VIVA’s VAT registration certificate is attached here (VAT Registration Certificate).

In line with VAT Law starting 1st January 2019, VAT at 5% will be added when you purchase a new SIM card, and on our tariffs and rates when you use your prepaid credit. VAT does not apply to international roaming or roaming add-ons.

No. VAT at 5% shall apply upon using your prepaid credit.

VAT does not apply on the purchase of recharge vouchers. VAT at 5% applies when you use your prepaid credit regardless of when the recharge has been made.

No, VAT applies on usage of credit, and not on the transfer of credit from one line to another.

5% VAT is included in the SIM card price applicable upon activation.

In accordance with the requirements set out in the Law and the Regulations, starting from January 1, 2019, VAT at 5% will be added to your monthly bill. VAT applies to all new and existing contracts. VAT does not apply to International Roaming services, Roaming Add-ons, deposits, and advance payments.

Yes, VAT at 5% will be added to the price of the new SIM card.

VAT is applicable on all services except for International credit transfer (for prepaid customers),International roaming, and roaming add-ons, deposits, and advance payments.

Yes, VAT applies to existing monthly contracts continuing into 2019, even if they were signed before 1 January 2019.

Yes, VAT applies on termination fees.

Yes. VAT is applicable on the service fee of both upgrades and downgrades.

Yes, when paying the full price or down payment on the purchase of a handset, VAT will be charged on the amount paid at the time of sale of the device / handset.

In the case of purchases made on an installment contract, VAT is applicable on the monthly installment amount and any additional services such as extended warranty, insurance, etc.

Yes, VAT is applicable on any associated migration fees and charged accordingly.

VAT will be applied to the total amount billed at a rate of 5%. This will be present in your bill summary.

In your invoice summary, VAT shall be calculated post any adjustments or discounts. In case of adjustments, as the value of the supply is adjusted, the corresponding amount of Tax related to the supply will also be adjusted and the VAT amount will be returned to you.

For the first bill issued after January 1, 2019 VAT shall be applied on total amount billed, unless otherwise specified in the VAT regulation.

For the first bill issued after 1 January 2019, VAT shall be applied on total amount billed, unless otherwise specified in the VAT regulation.

No. VAT is not applicable on outstanding bills issued in 2018.

Yes, 5% VAT will be charged at time of purchase of digital gift card