Quick answer: Net VAT = output VAT on your sales − input VAT on your purchases. With 25,000.000 BHD of sales, 1,000.000 BHD of returns and 12,000.000 BHD of purchases before VAT, you owe 2,400.000 BHD − 1,200.000 BHD = 1,200.000 BHD.
How it's calculated
Pick VAT exclusive if your figures are before VAT, or VAT inclusive if they already contain it. Most accounting reports show sales before VAT, but till receipts and card statements usually include it.
Enter the period's sales taxed at 10%. If you gave customers refunds or credit notes, turn on Include returns and enter them too. The VAT on what's left is your output VAT.
Then enter purchases you hold a valid tax invoice for, with any returns to suppliers under their own switch. The VAT on those is your input VAT. If the net comes out negative, you have a credit rather than a bill.
To check a single price instead of a whole period, use the Bahrain VAT calculator.
Worked examples
- Sales 25,000.000 BHD, returns 1,000.000 BHD, purchases 12,000.000 BHD, all before VAT: 2,400.000 − 1,200.000 = 1,200.000
- The same sales and purchases entered including 10% VAT: 2,500.000 − 1,200.000 = 1,300.000
- Sales 12,000.000 BHD and purchases 25,000.000 BHD (a heavy buying month): 1,200.000 − 2,500.000 = -1,300.000 (credit)
What goes in each box
Output VAT is the 10% you charged customers. Zero-rated sales, such as exports outside the GCC, and exempt sales go on the return too, but they carry no VAT, so they don't change the amount you owe and you can leave them out here.
Input VAT is the 10% you paid suppliers on business costs. You can only claim it with a proper tax invoice, and not on everything: VAT on entertaining clients, on cars available for private use and on personal spending usually can't be recovered.
Filing and paying in Bahrain
Businesses with annual supplies over BHD 3 million file monthly, and the rest file quarterly. The return and the payment are due by the last day of the month after the period ends.
Late returns and late payments are both penalised under the VAT law, so file on time even when the amount is small or nothing is due.
Frequently asked questions
What's the difference between output VAT and input VAT?
Output VAT is what you charge on your sales. Input VAT is what you pay on your purchases. The return is simply output minus input: you pay the difference, or claim it back if input is bigger.
What happens if my input VAT is more than my output VAT?
You have a credit. You can ask the NBR for a refund or carry it forward to reduce the next return. Refund claims are often checked before they're paid, so keep your invoices handy.
My sales figure already includes VAT. What do I do?
Switch to "VAT inclusive". The calculator then takes 10/110 of each amount as VAT instead of adding 10% on top.
How do returns and credit notes change my VAT?
A refund to a customer reduces your output VAT for the period it's issued in. A credit note from a supplier reduces your input VAT. Both are entered as positive amounts here and subtracted for you.
Do I include zero-rated and exempt sales?
Not in this calculator. They're reported on the return but carry no VAT. One catch: if you make a lot of exempt sales, some of your input VAT may not be fully claimable, and that needs an apportionment your accountant can do.
Do I have to register for VAT in Bahrain?
Yes, once your supplies pass BHD 37,500 a year. From BHD 18,750 you can register voluntarily.
Why does the result have three decimals?
The Bahraini dinar is split into 1,000 fils, so VAT is worked out to three decimal places, the same as on your invoices.
Was Bahrain's VAT always 10%?
No. It started at 5% in January 2019 and went up to 10% on 1 January 2022. Use the old rate only if you're correcting a return from before then.