Small and medium-sized enterprises (SMEs) in Bahrain have been given strict warning to
register ahead of the December 20 deadline for the value-added tax (VAT) scheme.

The new taxation scheme was initiated in Bahrain on the first day of January this year
for companies with taxable revenues of over 5 million Bahraini Dinars (US$13.29 million).

On the other hand, enterprises with revenues exceeding 500,000 Bahraini Dinars were given
until the 20 th of June to register, while SMEs with earnings between 37,500 (US$99,734) and
500,000 Bahraini Dinars are given until 20 th of December to register for the VAT taxation
scheme.

Ahmed Al Muqahawi, Muharraq Municipal Council member said that low registration rates
prompted the warning, “I urge all SME owners to register with the National Bureau for Revenue
(NBR) ahead of the deadline to avoid costly last-minute rush as well as punishments for not
registering.”

Ahmed stressed that many businesses seem to be taking the new regulation lightly or some
may simply be uninformed of the procedures. The corresponding punishment that will be
imposed on SMEs who fail to register for VAT is three to seven years in prison plus a fine equal
to the tax amount or up to three times of that amount.