English text status

English translation published by the NBR in its bilingual Regulations file (marked unofficial). The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.

Practical summary

Annual Supplies of Related Persons are aggregated for the registration test where financial, economic and organisational links exist. If the aggregate exceeds the mandatory threshold, each relevant Person applies individually; the NBR may register them automatically where business fragmentation to avoid registration is established.

Who should read this?

Owners, family Groups, Related companies and operators using more than one entity or commercial registration.

Why does it matter?

Splitting activity across entities each below BHD 37,500 does not end the analysis. The three links trigger aggregation, but this does not itself create a Tax Group: the rule requires individual applications and counters avoidance-driven fragmentation.

Three linksSupply aggregationIndividual registration

Current text

A. The value of the annual Supplies made by each Related Person shall be added to determine the total value of the annual Supplies for registration purposes in the Kingdom. B. Related Persons must have financial, economic and regulatory ties. C. If the total value of annual Supplies exceeds the Mandatory Registration Threshold, each of the Related Persons concerned shall apply individually to the Bureau for registration and the Bureau may register such Persons with immediate effect, when it is proven that they segregated their business to avoid registration for Tax.

Test Related Persons

  1. 1

    Identify the financial links.

  2. 2

    Identify economic links in activity, customers and commercial purpose.

  3. 3

    Identify organisational links, management or common control.

  4. 4

    Aggregate included annual Supplies and compare the result with BHD 37,500.

  5. 5

    Document a genuine commercial basis for separate entities.

  6. 6

    Where the aggregate exceeds the threshold, test each Person's individual filing duty rather than wait for automatic registration.

Connected provisions

Direct legislative link

Law — Article (31)

Automatic registration of Related Persons

The Law enables registration in cases set by the Regulations; this Article supplies the aggregation and fragmentation test.

Open connected Article
Direct legislative link

Regulations — Article (34)

Annual Supplies calculation

Related Person Supplies enter the threshold calculation where Article (40) applies.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (40)

Official guide

VAT Registration Guide — Version 1.10

Tax Group and registration

Connected Madar tools

Connected Madar tools

VAT Registration Centre

Check registration thresholds using your inputs, with mandatory, voluntary and uncertain cases distinguished.

Illustrative example by Madar

Two activities total BHD 40,000

If two Related Persons each make BHD 20,000 of included Supplies, neither individual figure ends the analysis. Where all three links exist, the BHD 40,000 aggregate requires each Person's registration duty and the reason for the split to be reviewed.

Questions to help you apply it

  • Do financial, economic and organisational links all exist?
  • What is the aggregate of included annual Supplies?
  • Is there a documented commercial reason for separation?
  • Has each relevant Person filed individually?