We are working hard to get approval for Manager as preferred software for small businesses in Bahrain and also to get the local authorities approval, however there are few challenges and hope we will soon get solution:
A) As per the Tax Authorities, know as NBR, the invoice format as Tax Invoice, both the Tax Rate and Amount of Tax must be in each row and also the total amount of VAT at the bottom, currently the Total amount is fine, however each row for items must have the 2 additional columns as described.
B) VAT Forms, there is form issued by NBR for VAT reporting on quarterly basis. We need it in Manager as already developed for Saudi Arabia.
We know Manager is not a Tax software, however there are other software in the competition having such built-in functions.
We can provide both the Tax Invoice and VAT Report format.
Would that not require application by the developer? It would be very unusual for a user to be able to have software approved by a national authority. After all, you have no control over future software changes. Is there any documentation that suggests this would be possible? Manager’s developer has never mentioned plans for obtaining certifications anywhere, but only to provide the ability to create localizations (a project still underway).
Note that the Executive Regulations, as with those for other sovereign jurisdictions participating in the overall GCC VAT scheme, require rates and VAT amounts to be included on the tax invoice. But nowhere do they specify that this information must be on a line-item basis, even thought the example shows that. And even the example itself graphically connects the text of the requirement to an entire box containing all line-item information, not to the VAT amount on any given line item. Manager indicates the tax rate applied on all line items, and the amounts for all different tax rates in total. So it meets the requirements of the Executive Regulations, as written, although the format does not match the example illustration. (There are many other ways Manager’s format does not match the illustration, too, although no one ever raises these other differences as issues.)
as i have posted in forum 2 weeks ago VAT (amount and rate) applied to each item is a request in my country too, but here is not asked to show the rate only the value per item- line, i cant use manager invoices in the actual format
Please understand. I do not dispute that some users want this change. Nor do I dispute that some jurisdictions may require tax amounts per line. I am only addressing the fact that Bahrain’s written Executive Regulations do not require it. This exact issue has come up from users in the UAE, as well. Their regulations are almost identical, yet their example illustrations are highly contradictory. VAT is new in several jurisdictions in the past few years. Not only are taxpayers struggling to understand, so are personnel within the tax authorities.
Now the only missing column is the VAT Amount, most importantly other solutions are having it means it’s quite common and not just to comply countries legislation.
Let’s take it a positive change as it’s demanded by customers.
If i understood correctly, it is necessary to have per line item when VAT rates are different, in which in Bahrain there are three VAT categories: 5%, 0% and Exempt (section 2 of VAT general guideline).
Hope this help to clarify, and let us know if anything can be done in the system to comply with Bahrain VAT requirements.
@Inline, your underlined text in the screen shot from the VAT guide is the issue. How should that be interpreted?
Manager will list the VAT rate separately for each line item when more than one rate is applied on a tax invoice. So there is no question about that. But it does not list the VAT amount for any line item, regardless of whether a single or multiple VAT rates are applied.
In my opinion, Manager is compliant for two reasons:
The Executive Regulations do not mention VAT amounts per line item, as I wrote in post #6 above. The VAT guide itself (p. 3) includes those regulations as the codification source.
The parenthetical comment mentions only “…where the VAT rate is different per line item.”
In other words, VAT amount per line item is not included as an explicit requirement anywhere. But VAT rate must be shown, however. And it makes sense that when multiple rates are used, these can only be shown on a per line item basis. That matches the parenthetical note.
I recommend producing a tax invoice with multiple rates and showing that to NBR to see if it would be acceptable.
In my email sent to them, i did attached a dummy invoice from Manager exactly as you have mentioned here, but it is a government entity so we cannot expect a straight answer in the first shot.
I will be meeting them in person this Thursday to show the dummy invoice again and see what they say.
Will post here their feedback again, i hope the way it is its okay.
Hi @Tut i met with the Bahrain VAT authorities (NBR) last month in person and i did show them the dummy invoices from Manager showing the two scenarios:
A-) one invoice having all products with 5% Vat only, and
B-) another invoice showing multiple items, some with 5% and others with 0% VAT.
The agent confirm that whenever multiple items having different tax rate in the same invoice, it is a must for this invoice to have the tax rate as well as the tax value per line item, and since i requested to have a formal confirmation, see below screen shot from the formal email received yesterday from NBR.
Well, @Inline, I do not know what to say, except that your tax authority is making an interpretation of the law that is not supported by the law itself. Of course, NBR would not be the first tax authority to do this, and a battle to force them to comply would be lengthy, expensive, and possibly have unpleasant consequences.
I think you will have to wait to see what direction @lubos takes on this. He has, in the past, expressed some willingness to add tax amounts to the program. I do not know his current plans in this regard.
