We use essential cookies to operate our website. Substantial capital flows in the form of financial aid packages increasingly reflect the new realities of the region. Sign up to receive the latest publications, event invitations, and our weekly newsletter delivered to your inbox. The latest capital injection likewise permits the government to shore up political support by stabilizing the country’s economic structures. The new austerity program includes a public-sector retirement scheme intended to trim the number of costly government employees, new corporate taxes, a review of state spending on water and energy subsidies, and a reduction in cash subsidies to citizens. Businesses are prompted to use the standard due date rules in relation to the earlier of: In the absence of any of the above occurring for any particular credit granted by a financial institution due to extended payment terms, VAT must at a minimum by accounted for at the end of a 12-month period. Recommendations 2013; Papers GCC Power 2013; GCC Power 2012 Muscat. Topics covered include: This is a very valuable support document for businesses in these sectors trading in Bahrain, especially when dealing with some of these more complex VAT matters.

Bahraini opposition groups, including the prominent al-Wefaq movement, have called for a boycott of the elections following the arrests of opposition members and their subsequent disqualification from the electoral process.

Saudi Arabia and the UAE previously implemented VAT on Jan. 1, 2018, according to a GCC-wide decision. Oman Library at the Middle East Institute, The 2020 American election: A view from the Gulf, The politics of aid: GCC support for Bahrain. Persistently low oil prices since late 2014 and declining crude oil production have taken a toll on Bahrain’s public finances, which depend on hydrocarbons for approximately 75 percent of government revenues. The important reasons of GCC (Gulf cooperation council) are: 3 min.

The phased disbursement of the aid package over the next five years can help the Bahraini government soften the impact of austerity by delaying certain measures or introducing new distributive mechanisms, such as providing entrepreneurial funding for retired government employees. While implementing a five percent VAT alone is unlikely to transform the Bahraini economy, it nevertheless serves as a symbolic gesture that Gulf aid to Bahrain is neither unconditional nor limitless.

© 2018 Middle East Institute All Rights Reserved | Accessibility Policy | Built by Social Driver. However, Bahrain’s parliament only ratified a bill authorizing VAT after the announcement of the fiscal package and a royal decree ordering parliament to decide on the tax.

While the guide is somewhat as expected in terms of VAT treatments to be applied, some valuable sections of this guide include the NBR's comments on contracted staff, board members and directors; charities and not-for-profits; and active and passive holding companies. The NBR has also published a new guide on economic activity, as well as a very timely new guide on transfer of going concern (TOGC) given the current climate of businesses reorganisations due to economic pressures. Gulf Cooperation Council Interconnection Authority Accounting and Auditing Organization of the Gulf Cooperation Council (GCC) Gulf Monetary council Gulf Economic Interactive Gate Advisory Board of the Supreme Council. GCC listed banks’ results GCC listed banks’ results New Age Banking - KPMG’s GCC listed bank results report that analyses the financial results for leading listed commercial banks across the GCC. Domestic politics within Bahrain play a key role in the timing of the fiscal support. Importantly, the transferor must be registered at the time of the transfer and not simply have submitted a VAT registration application, which is acceptable in other Gulf countries. Sign-up to follow topics, sectors, people and also have the option to receive a weekly update of lastest news across your areas of interest. Gulf Cooperation Council (GCC), political and economic alliance of six Middle Eastern countries Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, and Oman. Fiscal support to Bahrain in the aftermath of 2011 predominantly sought political stabilization through infrastructure expenditures and thus made little impact on economic reform agendas. The first installment of the aid package, which consists of $2 billion and should be delivered by the end of 2018, will afford Bahrain’s government the monetary maneuverability to avoid a full-blown financial crisis in the short term. read. The NBR has released an economic activity guide (25-page / 865KB PDF) setting out what is and is not viewed as representing an 'economic activity' within Bahrain, and therefore within the scope of the VAT regime. However, this recent example of fiscal aid also reflects an effort by regional actors to push through top-down reforms in an increasingly polarized region. Bahrain will utilize the financial windfall to address its budget deficit, which reached 14 percent of GDP in 2017, and mitigate the negative effects of its new austerity program.

The NBR has released a two-page public clarification (188KB PDF) on the VAT consequences of the six-month loan repayment holiday introduced by financial institutions in Bahrain in response to the Covid-19 crisis. Papers GCC Power 2014; Recomendations; GCC Power 2013 U.A.E.
As a result, the structures of economic interdependence within the GCC region are highly unequal. It remains to be seen how long these capital flows will continue and whether or not they can achieve sustainable economic results in the kingdom. In early October, Saudi Arabia, the United Arab Emirates (UAE), and Kuwait announced an economic aid package of $10 billion for Bahrain. GCC Power 2014 Bahrain. Previous financial support for Bahrain––notably the $10 billion aid package in 2011––leveraged economic development funding to address bottom-up, socioeconomic grievances that had escalated into political demonstrations and violent protests. Regional Links.

(Version 3.0) GCC Statistical Center (GCC-STAT), Arab Bureau Of Education For The Gulf States, Council of Ministers of Labour and Ministry of Social Affairs in GCC states, Gulf Organization For Industrial Consulting, G.C.C Joint Program Production Institution, Gulf Cooperation Council Interconnection Authority, Accounting and Auditing Organization of the Gulf Cooperation Council (GCC), United Nations Economic and Social Commission for Western Asia, Food and Agriculture Organization of the United Nations, The Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC), The Portal of The Cooperation Council for the Arab States of the Gulf.

agent and intermediary relationships, including host stores and concessions; asset financing and the profit margin scheme; vouchers, gift cards, coupons and loyalty schemes; when the consideration (e.g. The country has the highest public debt to gross domestic product ratio among the GCC member states, reaching 89 percent.

The fiscal aid package also has longer-term objectives connected to the international political economy dynamics of the region. Papers GCC Power 2012; Recommendations 2012; Tutorials GCC Power 2012; GCC Power 2011 Kuwait. The guide also deals with some tricky areas of VAT applicable to businesses in this sector, who perhaps have required clarity on the application of the law to their specific circumstances. 1763 N St. NW, Washington D.C. 20036.

A GCC fraught with crisis, renewed calls for economic diversification, and polarizing foreign policy agendas increase the stakes for both the grantees and recipients of financial aid. In August 2018, Qatar pledged $15 billion to shore up Turkey’s beleaguered banking system, while Saudi Arabia, the UAE, and Kuwait pledged $2.5 billion in fiscal aid to support Jordan in June of this year. Elsewedy Electric is a world leader in products and services for energy, digital and infrastructure. GCC residents are unable to travel with the issued ID card. We are working on a technical solution to provide you with control over our use of non-essential cookies.

The fiscal pledge illustrates how massive capital flows underlie the contentious politics and strategic alliances within the Gulf Cooperation Council (GCC) and the broader Middle East region. Bahrain's National Bureau for Revenue (NBR) is continuing to issue new sector and topic-specific VAT guidance, to provide support and clarity to businesses operating in the state. the date of payment of the consideration by the borrower. The NBR's new retail and wholesale VAT guide (74-page / 3.3MB PDF) is one of the most detailed it has released to date. Qatar remains in a strong fiscal position despite the Saudi-led economic and diplomatic blockade, and exhibits a substantial degree of economic and political autonomy when compared to Bahrain. Nevertheless, the parliamentary elections do offer an institutional mechanism for citizens to voice their socioeconomic grievances. The guide walks businesses in these sectors through all of the basic VAT concepts and principles and how they specifically apply to the types of activities often seen in this sector.

Even in the event of a boycott, the elections would still give opposition groups an opportunity for political theatre.

Unlike Bahrain, the GCC states of Qatar and Oman have greater room to maneuver around sensitive economic reforms and to manage fiscal consolidation at their own pace. The GCC was established in Riyadh, Saudia Arabia, in May 1981. Middle East Institute In the absence of this step, the TOGC rules will not apply and the transaction will fall back to the usual Bahrain VAT rules.

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The guide also helpfully walks taxpayers through some of the more practically difficult aspects of a business transfer such as transactions with vendors or customers after the transfer; bad debts; warranties; and the interaction of the TOGC rules with VAT group provisions. The NBR's new guide to transfer of going concern (TOGC) (27-page / 739KB PDF) is particularly timely, given the impact of Covid-19 and the price of oil on the Bahrain economy. The ID card allows access to health centers, public and private hospitals or any official organization in the Kingdom of Bahrain (ministries and governmental entities).

The NBR has also released a brief clarification on how the temporary Loan Repayment Holiday should be dealt with from a VAT perspective. Specially, the public clarification deals with the timing of accounting for VAT on these financial services as a result of the extended payment holiday period.

The ID card cannot be utilized as an alternative to the driver’s license. Importantly, each party must independently notify the NBR of the transaction within 30 days of the sale or transfer, via the appropriate form. We also use ‘non-essential’ cookies to inform improvements to our site and provide you with a better experience.

Moreover, international analysts are worried that Bahrain may not be able to redeem a $750 million Islamic bond that is scheduled to mature in November. The eGovernment National Portal - Kingdom of Bahrain, provides a one-stop shop that facilitates the access to government Information and eServices.

These economic reform and fiscal consolidation initiatives will inevitably mean a reduction in state spending and benefits for citizens.

Copyrights © 2014- These include the need for the business being transferred to be capable of being operated on an independent basis (the 'going concern' condition); and the need for the transferee to immediately use the business assets for the same or a similar trade activity.

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