VAT reverse charge

VAT reverse charge is an anti-fraud measure that applies to the sale and purchase of specific goods and services. These are typically high value, portable, electronics such as mobile phones. The reverse charge procedure holds the purchaser liable to account for the VAT on the sale.

VAT is not charged by the vendor. The invoice must show the value of VAT due under the reverse charge rules. It must state that the reverse charge applies, and that the trading account customer is required to account for the VAT.

Bahrain specifics

Under this special rule, the Bahrain VAT liability for certain taxable transactions is shifted from the supplier to the customer. The customer becomes liable for the VAT that is due on the supply as output tax and to report it in their tax return. This is called the reverse-charge mechanism. There are situations where the reverse-charge mechanism is by default and situations where it is subject to the NBR approval.

Any taxable persons over BHD 18,750 in annual supplies are eligible for voluntary registration.

How Infor meets this requirement

You must enable the VAT reverse process. Perform these tasks to enable and process VAT reverse charges:

See Enabling the VAT/GST reverse indicator.

See Creating Payables invoice record.