Bahrain: Preparing for VAT field audits
The National Bureau for Revenue (NBR) will conduct in-person VAT field audits, which will commence with the NBR issuing a notice of visit.
The National Bureau for Revenue will conduct in-person VAT field audits
Value added tax (VAT) audits by the National Bureau for Revenue (NBR) play a critical role in providing compliance with the Bahrain VAT laws and executive regulations.
In addition to requests for information/queries via email or through the taxpayer portal, the NBR also has the right to conduct in-person VAT field audits, which will commence with the NBR issuing a notice of visit. The notice period for the visit can be as short as a few days.
The notice of visit will generally be in relation to a specific tax period to be examined. However, during the visit the NBR may expand the audit to include additional tax periods. The notice of visit will generally specify the following:
- The factory, shop, establishment, office or warehouse to be visited
- The tax period(s) under review
- The date and timing of visit
- Documents to be kept ready before the visit
- Details of the NBR personnel conducting the audit
Under the Bahrain VAT laws, the NBR has the power to do any of the following during a field visit:
- Check records, documents, bank statements and financial statements
- Collect data for further examination
- Interview relevant staff (this may not be restricted to the finance or the in-house VAT team)
- Inspect and access IT systems
- Record violations
- In certain instances, close the premises on a precautionary basis if the NBR suspects serious breaches
KPMG observation
Field audits can be quite onerous and time-consuming. Providing incorrect or incomplete information can potentially lead to disputes and penalties.
Read an October 2022 report [PDF 114 KB] prepared by the KPMG member firm in Bahrain
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