Maintaining Accounts and Records under Bahrain VAT

Yarab A, Jan-31-2020

Maintaining the books of accounts and records is one of compliance responsibility of the business registered under Bahrain VAT. The Bahrain VAT regulation prescribes different types of records to maintained and time period for retaining such records.

In this article, we will discuss different types of records to maintained and time period to retain it.

Retention of Records and Accounting books

The following are records and books as prescribed in the Bahrain VAT regulations which a VAT registered business should maintain.

Accounting books related to the Taxable Person’s work (all the transactions according to their chronological and numerical order)
Balance sheet and profit and loss account
Records of salaries and wages
Records of fixed assets
Inventory records and accounts (including quantities and values) at the end of any relevant tax period
A copy of tax Invoices, creditand debit notes issued, and original Tax Invoices received by the taxable person
All customs documents relating to import and export transactions carried out by the taxable person
Additional records determined by the Bureau

These records should be retained in a secure way to avoid their damage, and in a state where they can be read and reviewed.

Retention period of records and accounting books

The taxable person should retain records and accounting books for a period of five years from the end of the tax period to which it relates.

For example: A Tax Invoice for a supply on 25th April’ 19 relates to the tax period of January-December '19. Hence, it should be retained until 31st December '24.

Records related to capital assets should be retained for a period of five years from the end of the tax period in which the adjustment period for such assets ends. Similarly, records related to real estate should be retained for a period of fifteen years from the end of the tax period to which they relate.

Retention of records and accounting books electronically

A taxable person may retain records and accounting books electronically if the following conditions are met:

Easy access and extraction of records and accounting books from the computer system upon the Bureau’s request.
Ability to keep documents and records that support the records and the accounting books electronically or in hard copy.
Records and accounting books are kept securely where no tampering or manipulation can occur.

The Bureau has the right to review the computer system or Accounting software used by a Taxable Person to ensure its compliance with the provisions of the Law and these Regulations.