Fama Accounting Services, Office 2294, Building 574 Road 31 Block 611 Al Hamriya, Bahrain
Fama Accounting Services, Office 2294, Building 574 Road 31 Block 611 Al Hamriya, Bahrain
Selling on Amazon is one of the fastest ways to scale your e-commerce business, but for sellers in Bahrain, VAT compliance is often the most confusing part of the journey. Between marketplace commissions, cross-border sales, and ever-changing VAT rules, one mistake can lead to penalties of up to 5,000 BHD.
This guide is designed for Amazon FBA and FBM sellers in Bahrain who want to understand how VAT works, when to register, how to collect VAT correctly, and how to stay compliant while growing their online business.
If you’re an Amazon seller in Bahrain, VAT isn’t optional—it’s a legal obligation. The National Bureau for Revenue (NBR) requires all businesses exceeding the threshold to register and collect VAT.
Here’s why VAT compliance is crucial:
Avoid penalties – Non-compliance leads to hefty fines and blocked Amazon payouts.
Maintain seller account health – Amazon requires compliance to keep your store active.
Build credibility – Customers trust sellers who operate transparently with proper invoicing.
Prepare for growth – Compliance now ensures smooth scaling across GCC markets.
Simply put, VAT is not just a tax—it’s a business survival requirement for Amazon sellers.
Not every seller has to register for VAT immediately. The threshold in Bahrain is 37,500 BHD annual turnover.
If your sales + expenses exceed 37,500 BHD, VAT registration is mandatory.
Voluntary registration is available from 18,750 BHD onwards—useful for startups looking to reclaim input VAT.
Example:
If you’re an Amazon FBA seller making 5,000 BHD per month, you’ll cross the threshold within 8 months and must register to avoid fines.
Key takeaway: If you’re serious about selling on Amazon in Bahrain, VAT registration isn’t a matter of “if”—it’s a matter of “when”.
VAT for e-commerce can get tricky because of multiple parties involved:
Amazon (Marketplace Facilitator) – Collects VAT on sales in certain jurisdictions.
You (Seller of Record) – Responsible for registering with NBR and reporting VAT correctly.
Customer (End Buyer) – Ultimately pays the VAT.
How it plays out in Bahrain:
When you sell an item, you add 10% VAT to the selling price.
If your turnover exceeds the threshold, you must remit VAT to the NBR every filing period.
Input VAT (on Amazon fees, shipping, packaging) can be reclaimed—reducing your liability.
The challenge lies in tracking these transactions properly, especially when Amazon deducts fees before payout.
Amazon sellers in Bahrain often run into the same VAT pitfalls:
Incorrect invoicing – Not issuing VAT-compliant invoices to customers.
Amazon fees confusion – Forgetting to claim VAT on commissions and storage fees.
Cross-border complexity – Selling to Saudi Arabia or UAE adds different VAT rules.
Late filings – Missing deadlines leads to penalties and interest.
No bookkeeping system – Relying on Amazon statements alone makes VAT reconciliation a nightmare.
These challenges are why outsourced VAT specialists are becoming essential for e-commerce entrepreneurs.
Our VAT services for Amazon sellers in Bahrain are designed to remove the burden from your shoulders. We:
Register your business for VAT with the NBR.
Set up VAT-compliant invoicing integrated with your Amazon account.
Track Amazon fees and input VAT to reduce your payable tax.
File VAT returns on time to avoid penalties.
Provide monthly bookkeeping for clear visibility into cash flow and profitability.
With us handling VAT, you can focus on scaling your Amazon store, not drowning in tax paperwork.
Many Amazon sellers in Bahrain don’t realize that Amazon charges VAT on its services too. Whether it’s referral fees, FBA storage charges, or PPC advertising, VAT applies—and you may be entitled to reclaim it.
Common areas where VAT is overlooked:
Amazon referral fees (usually 8–15% of sales).
FBA storage and fulfillment charges.
Amazon Advertising spend (PPC campaigns).
Third-party shipping and packaging suppliers.
By tracking input VAT correctly, sellers can reduce their VAT payable to the NBR. For example, if you owe 2,000 BHD in VAT on sales but spent 500 BHD on Amazon fees (with VAT included), you only remit 1,500 BHD.
Without proper bookkeeping, sellers often overpay VAT—cutting directly into their profit margins.
One of the biggest advantages of selling on Amazon from Bahrain is regional access—but this comes with VAT complexity.
Selling to Saudi Arabia (KSA): Requires VAT registration in KSA if you cross the threshold.
Selling to UAE: Similar rules apply; you may need a local VAT number.
Other GCC countries: Rules are still evolving under the Unified VAT Agreement.
If you’re fulfilling cross-border orders via Amazon, you must:
Determine where VAT is due (Bahrain or destination country).
Adjust pricing strategies to remain competitive while compliant.
Avoid double taxation by properly categorizing exports.
This is where having a VAT advisor with regional expertise saves you from costly mistakes.
We’ve audited dozens of Amazon sellers in Bahrain, and the mistakes are surprisingly consistent:
Not registering for VAT early enough – waiting until they’re flagged.
Mixing personal and business accounts – making reconciliation impossible.
Relying only on Amazon reports – missing transactions and misreporting.
Forgetting input VAT claims – overpaying tax month after month.
Late filings – focusing on sales, neglecting compliance.
The result? Penalties, account suspensions, and lost credibility.
Pro tip: If you want to avoid these mistakes, implement a monthly bookkeeping system alongside VAT filing. It creates a clear audit trail for every transaction.
Here’s what a typical VAT filing cycle looks like for Amazon sellers in Bahrain:
Collect Sales Data – Pull reports from Amazon Seller Central.
Verify Fees & Expenses – Include Amazon deductions, shipping, and advertising costs.
Calculate Output VAT – Total VAT collected on sales.
Calculate Input VAT – VAT paid on fees and expenses.
Prepare VAT Return – Summarize amounts payable or reclaimable.
Submit to NBR – File online through the NBR portal.
Make Payment – Transfer VAT due before the deadline.
This process is simple in theory, complex in practice—especially when reconciling multiple marketplaces and currencies.
Trying to manage VAT compliance alone while scaling your Amazon business is like trying to captain a ship and navigate stormy seas without a compass. Outsourcing brings:
Peace of mind – No missed deadlines, no penalties.
Accuracy – Expert reconciliation of Amazon reports and bank statements.
Time savings – More focus on product sourcing, marketing, and growth.
Cost savings – Maximize input VAT claims and avoid overpaying tax.
Scalability – Support for multi-country VAT compliance as you expand.
In short, outsourcing VAT is not a cost—it’s an investment in stress-free growth.
Amazon sellers in Bahrain typically operate under two models: FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant). VAT obligations differ slightly:
FBA Sellers – Amazon stores and ships products on your behalf. VAT must be calculated on the full selling price, including storage and fulfillment fees. Input VAT on these Amazon charges can often be reclaimed.
FBM Sellers – You manage your own inventory and shipping. VAT compliance is more straightforward, but you’re fully responsible for issuing invoices and maintaining records.
Both models require accurate VAT filing, but FBA adds extra complexity due to international logistics, cross-border sales, and Amazon’s handling of invoices.
Let’s look at a real-world example:
Business: A Bahrain-based seller specializing in electronics.
Challenge: Exceeded VAT threshold quickly but didn’t register until penalties were triggered. Struggled with reconciling Amazon reports.
Solution: Outsourced VAT filing and monthly bookkeeping. Implemented an invoicing system synced with Amazon transactions.
Result: Within 6 months, the business avoided further fines, reclaimed VAT on advertising fees, and confidently expanded into Saudi Arabia.
This case proves that VAT compliance isn’t just about avoiding penalties—it’s about unlocking growth potential.
Customers today are savvy. They notice whether sellers issue proper VAT invoices and charge taxes correctly.
Why it matters:
Customer confidence – A VAT-compliant invoice reassures buyers you’re a legitimate business.
Amazon’s marketplace rules – Non-compliant sellers risk suspension.
Corporate buyers – Many B2B customers require VAT invoices to reclaim their input VAT.
By staying compliant, you position yourself as a trustworthy, professional seller—not just another online vendor.
Manually tracking VAT across hundreds of Amazon transactions is overwhelming. That’s why we integrate technology into our process.
Popular tools we use:
Xero – Cloud accounting with Amazon integration.
QuickBooks Online – Perfect for small Amazon sellers.
TaxJar / Avalara – Automated VAT tracking across multiple countries.
Custom reporting dashboards – For clear insights on VAT liabilities.
These tools save time, reduce errors, and ensure you always have an audit-ready financial trail.
If you’re selling on Amazon and not sure whether VAT applies to you yet, the safest step is to speak to a VAT advisor early.
Our team helps with:
VAT registration with NBR.
Monthly VAT return filing.
Amazon sales and fee reconciliation.
Multi-country VAT strategy (Saudi, UAE, GCC).
Ongoing compliance monitoring.
We make VAT simple, affordable, and stress-free, so you can focus on scaling your e-commerce business.
Minimize risks and maximize growth with our comprehensive accounting solutions in Bahrain.
Below is an overview of our general pricing packages for our suite of services in Bahrain. Costs vary depending on factors such as the services we offer.
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