Section I – Introduction
The Kingdom of Bahrain has published the Value Added Tax (VAT) Decree Law No. (48) on the 10th of October 2018. The law governs the application of VAT in the Kingdom of Bahrain and it consists of 79 Articles. The Law shall be into effect on 1st of January 2019.
VAT is required by the regulation to be charged by businesses that are registered for VAT in the Kingdom of Bahrain. In general, the supplies of goods and services are taxable at the Standard Rate of 5% throughout the supply chain, unless the VAT legislation specifically provides that such supplies are Zero-rated or Exempt.
VIVA is obligated to comply with the requirements of the (VAT) Decree Law No. (48) and its Executive Regulations issued under decision (12) of 2018 by the Ministry of Finance and National Economy, which are regulating the Value Added Tax (VAT) and its application in the Kingdom of Bahrain.
Accordingly, from 1st January 2019, products and services provided by VIVA shall have VAT applied upon their charges / fees in compliance with the provisions of the Law and its Executive Regulations.
Section II – General FAQ’s
1) What is VAT?
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 Government.
Both individual and business customers will be required to pay VAT on goods and services purchased from VIVA.
2) When will the VAT go into effect?
VAT will be introduced in the Kingdom of Bahrain on the 1st of January 2019
3) What will be the applicable VAT rates?
VAT will be introduced in the Kingdom of Bahrain on the 1st of January 2019 at the Standard Rate of 5% unless the VAT legislation specifically provides that such supplies are Zero-rated, Exempt or outside the scope of VAT.
All the Telecommunication goods and services fall within the Standard VAT rate of 5%.
4) How will VAT apply to VIVA products and services?
A 5% VAT will be added to the postpaid bills upon issuance of the bill.
5% VAT will be added to the prices of the prepaid starter-pack and the prepaid top-up / re-charge vouchers.
5) Is it compulsory to pay VAT?
As per the VAT regulation, it is mandatory for all businesses exceeding certain turnover thresholds to register for VAT and consequently charge VAT on all goods and services offered. VIVA is one of the business required to register for VAT and must start charging VAT from 1 January 2019
VAT-registered businesses must report to the National Bureau for Taxation all the amounts of VAT they have charged and the amount of VAT they have incurred on a regular basis.
For further details, please visit https://www.nbt.gov.bh. Also, please look at business customer (link to Business VAT FAQ Tab (Business FAQ below)).
6) How can a business register for VAT and receive a Tax Identification Number (“TIN”)?
For reference, businesses can register for VAT through the NBT Website https://www.nbt.gov.bh/
7) What is VIVA’s Tax Identification Number?
In accordance with the requirements set out in the Law and the Regulations, VIVA’s (“TIN”) will be included on its Tax Invoice.
For reference, VIVA’s VAT registration certificate is attached here(link to VAT Registration Certificate).
Section IV –Personal FAQ’s for Postpaid customers
8) I am a postpaid customer, how am I affected by VAT?
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 and Roaming Add-ons.
9) If I buy a new postpaid SIM, will I pay VAT?
Yes, VAT at 5% will be added to the price of the new Sim card
10) What is VAT applicable to?
VAT is applicable on all services except for International credit transfer (for prepaid customers), roaming, and roaming add-ons only
11) Does VAT apply to contracts that starts before 1 January 2019?
Yes, VAT applies to existing monthly contracts continuing into 2019, even if they were signed before January 1, 2019.
Please refer to our Terms and Conditions for more information.
12) Is VAT applicable on foreclosure termination fees?
Yes, VAT applies on termination fees.
13) Is VAT applicable on upgrade or downgrade of the plan fees?
Yes. VAT is applicable on the service fee of both upgrades and downgrades
14) Does VAT apply on the purchase of handsets and other devices?
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
15) Does VAT apply on the purchase of handsets through an installment plan?
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.
16) Does VAT apply on the migration fees from Postpaid to Prepaid?
Yes, VAT is applicable on any associated migration fees and charged accordingly.
17) How will VAT charges be displayed on bill?
VAT will be applied to the total amount billed at a rate of 5%. This will be present in your bill summary.
18) What are the VAT adjustments on my bill?
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.
19) If my bill is issued on 10th of the month, how will VAT be applied?
20) If my bill is issued on 20th of December, how will VAT be applied?
21) What if I pay my late bills from 2018, do I pay with tax?
No VAT is applicable on 2018 and earlier bills. No VAT is due on payment of previously issued bills
Section V –Business FAQ’s
22) Does VAT apply on my VIVA service?
In line with Kingdom of Bahrain Government mandate, starting January 1, 2019, VAT at 5% will be charged to your monthly bill on all goods and services apart from International Roaming services and Roaming Add-ons.
23) How will VAT be reflected on my bill?
VAT is applicable on the overall net billed amount and will be reflected on your bill as a separate line item in the account summary.
24) As a business customer do I need to share my Tax Identification number (TIN) and certificate with VIVA?
As per the law, it is not mandatory to share your Tax Identification Number (TIN) with VIVA.
25) Where can I find VIVA’s Tax Identification Number (TIN)?
VIVA’s Tax Identification Number (TIN), shall appear on the top of your bill. You can also refer to the following link to view VIVA’s TIN and VAT Registration Certificate. (LINK)
26) Will VAT apply if I purchase a new SIM after January 1, 2019?
Yes, when purchasing a new SIM card, VAT will be added to the price of the new SIM card.
27) Does VAT apply on any activation, termination fees, etc.?
Yes, VAT is applicable on any billed transactions.
28) Is it possible to pay my VIVA bills without paying VAT?
It Eventually, it is mandatory to pay the VAT related to your bill as per the VAT regulation
29) Does VAT apply on new services that are subscribed to during 2019?
Yes, VAT is applicable on all services subscribed to during 2019 onwards. VAT does not apply to International Roaming Services and Roaming Add-ons.
30) Does VAT apply on the purchase of a new device/handset with the device instalment offer?
In the case of purchases made on our device instalment offer, VAT is applicable on the monthly instalment amount and any additional services such as extended warranty, insurance etc. VAT also applies to any associated down-payment made against the device/handset.
31) Does VAT apply on plans where a new device/handset is an included benefit?
Yes, for plans with included handset benefits, VAT is applicable on the monthly recurring charge of the plan and the additional usage thereof. VAT also applies on any associated down-payment if any.
32) Does VAT apply on the purchase of device/handset without any plan, i.e. on a standalone basis?
Yes, VAT is applicable and will be charged on the handset sale price.
33) This month’s bill looks different than bill I am used receiving, what has changed?
Business customers’ bills can be delivered to you in three different formats:
VAT shall be shown on your invoice summary in all cases. From 1 Jan 2019 VAT is 5% applicable to the current month charges net of any adjustments and discounts.
In the departmental and corporate bills, more VAT related breakdown will be shown per MSISDN.
This bill also serves as your valid “Tax Invoice”, Taxable Persons can hold the “Tax Invoice” issued by VIVA to deduct VAT charged as Input Tax.
34) What does subtotal of non -taxable services (including any VAT adjustment) mean?
The sum of your charges of non-taxable items, such as International Roaming services and Roaming Add-ons, will not be part of the net current charges which are taxable. This will also include any VAT related adjustments from the previous month(s).