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Know all about issuing Tax invoices (Bahrain)
A registered person must issue a tax invoice for any goods and/or services supplied by him. The issue can be raised in electronic as well as in paper form. The invoice can be issued in English or Arabic. The invoice issued must be in BHD currency. If the original tax invoice issued is tampered or lost or damaged, then the supplier may issue a duplicate invoice.
When to issue a TAX invoice?
The supplier of goods or service must issue a tax invoice latest by 15th of the month following, in which the supply took place. Any delay in the same, causes’ penalty.
Types of invoices
There are three types of invoice
- Simplified tax invoice
- Tax invoice.
- Bank statement (May be issued by banks to their customers)
A simplified tax invoice can be issued in the following 2 scenarios:
- Where the supply is provided to a unregistered person.
- Where the consideration of the supply is less than BHD 500 (inclusive of VAT).
Contents of Tax Invoice
A tax invoice should contain the following details:
- The date on which the invoice was issued.
- The label “Tax Invoice”.
- Invoice number (sequential and unique number).
- Details of the supplier. (Name and address)
- Tax ID of the supplier.
- Details of the customer.( Name and address)
- Description and quantity of the goods or service supplied.
- VAT applicable on the supply (include explanation if standard rate is not applied).
- Gross and net values of the supply.
- The total amount due, inclusive of VAT, in BHD.
- Where a transaction is exempt from VAT, it should be stated.
Contents of simplified Tax Invoice
- Supplier’s name and address.
- Supplier’s VAT number.
- Date of issuance of the simplified tax invoice.
- Description of the goods and services supplied.
- Total amount due on the supply, inclusive of VAT, in BHD.
- VAT rate applied and amount of VAT charged in BHD
Contents of a Bank Statement
A bank statement issued by a bank can be treated as a valid tax invoice when it contains the following information:
- The name, address and TRN11 of the bank.
- The name and address of the customer.
- The date of issue of the bank statement.
- The VAT rate applicable for each supply.
- The amount of VAT due for each supply.
There is also Summarized tax invoice issued, when the supplies are made to a same person within a month. However, it may not be possible to issue a tax invoice in every case, so the customer can issue a self-issued tax invoice.
For a self-issued tax invoice following conditions needs to be satisfied:
- There is an agreement in writing between both parties.
- Where the supplier is able to approve every tax invoice issued by the customer on his behalf.
- The tax invoice clearly states that it is issued by the customer on behalf of the supplier.
- The customer retains a copy of every tax invoice issued on behalf of the supplier.
- The invoice issued by the customer on behalf of the supplier qualifies as a Tax Invoice.
Adjustment to issue of Tax Invoice
Where the VAT due on the tax invoice is overstated or understated then the supplier must make adjustment by issuing a credit note or debit note.
Where a change in a taxable supply leads to an increase in output tax, a debit note must be issued. This is issued no later than by the 15th day of the month following the month during which the adjustment was done.
Where a change in a taxable supply leads to a reduction of output tax, a tax credit note must be issued. This may arise where:
- The supply is returned, cancelled or rejected.
- The original value of the supply is amended.
- The output tax under the bad debt relief provisions.
A credit note must be issued no later than by the 15th of the month following the month during which the adjustment was done.
Content of Tax debit and credit notes should contain the following:
- The label “Credit Note” or “Debit Note”, clearly displayed.
- The name, address and TRN12 of the supplier.
- The name and address of the customer.
- The date of issue of the debit note or credit note.
- The sequential number of the credit note or debit note.
- The sequential number of the original tax invoice.
- The adjusted value of the supply and the adjusted amount of VAT.