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Prerequisite for tax group application

There are two types of group members:
  1. Group representative (with or without common control)
  2. Group member (with or without common control)

Conditions for forming tax group

Following conditions must be met mandatorily by the group members

  1. All group members must be conducting economic activities
  2. All group members must be registered for VAT on the date of applying for group registration
  3. All group members must be residents in Bahrain. Non-resident taxpayers are not allowed to become a part of a group
  4. A group member must not be part of another group
  5. All group members must be related based on meeting the following control conditions

Two or more persons act in a formal partnership arrangement that meets at least one of the following control criteria:

  • A voting interest, in each of those entities, of at least 50% either directly or indirectly
  • A market value interest, in each of those entities, of at least 50% either directly or indirectly
  • Control by any other means (it is worth noting that common ownership does not necessarily mean that the owner is a member in the Tax group)

Evidence of control

Applicants must also submit evidence of control conditions which can include but are not limited to the following documents:

  1. Power of Attorney (PoA) issued by the group members and stamped by the Ministry of Justice that appoints the group representative
  2. Written consent from the taxpayer appointed as a group representative
  3. Memorandum of association
  4. Article of association
  5. Unless a formal arrangement has been entered into between partners, evidence of the informal nature of the arrangement and the ability for the parties concerned to exercise control will be required
  6. Details of shareholding in subsidiaries

Documents readability

The submission of evidence to support common control is mandatory and must fulfil the following requirements

  1. Be legible and clear to understand
  2. Be comprehensive to the extent possible
  3. Establish common control between every group member and common controller without any reasonable doubt
  4. All attachments must be clearly marked with the group member they are referring to – Recommended naming convention for attachment: (group member’s VAT) – (document description)
  5. Clearly specify in the form wwhereinthe attachments must NBT look for evidence to investigate common control for each respective taxpayer

Submission of additional information

Submission of additional information is not allowed after the application has been approved

The application form must be error-free and clearly capture the relevant information.  Please fill this excel based application with relevant details about the group members and send it with relevant attachments to [email protected] with Subject as “Group registration application”. Applicants with successful group registration applications must submit their requests online when they are notified by NBT. Please use the group representative’s registered email ID to submit the group VAT registration application

Rejection of application

In case one of the above requirements is not met, the Tax Group registration application will be cancelled

NBT holds the right to reject or cancel an application if,

  1. It is not satisfied with the information provided in the application or
  2. Evidence submitted does not support the common control

 

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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