Bahrain: Amended VAT place-of-supply rules for telecommunication services

Bahrain: Amended VAT place-of-supply rules

The tax authority issued proposed guidance—VAT Public Clarification VAT/PC/20/3 (31 December 2020)—addressing a change to the value added tax (VAT) place-of-supply rules for telecommunication services.


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The proposed effective date is 1 February 2021.

Under the measures, the place of supply of telecommunication services provided to customers not registered for VAT purposes in Bahrain would be the place of use and enjoyment of such services. This means the place of supply (and the allocation of taxing rights) would be determined according to the location where the users are situated when they use or enjoy the services—and not necessarily the location where they habitually reside.

The proposed guidance would address instances when providers of telecommunication services to customers “roaming” in Bahrain and thus would need to register and account for VAT in Bahrain (assuming the customer is not registered for VAT). The guidance is intended to address this issue by amending the scope of place of use and enjoyment and consequently the place of supply for telecommunication services provided to customers not registered for VAT in Bahrain.

Read a January 2021 report [PDF 201 KB] prepared by the KPMG member firm in Bahrain

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