Value of supply

Here you would know the basics and essentials on the workings of VAT in Bahrain. This is a must read and educative knowledgebase for those new to applying VAT within an Organization.
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Value of supply

Mon Oct 15, 2018 4:35 pm

What is the value of supply? How is it calculated?
The value of supply is the amount collected by the supplier for the supply of goods or services. It’s inclusive of expenses and charges that the supplier passes on to the buyer (such as shipping and handling charges). Simply put, the value of supply is the amount paid by the buyer, excluding VAT.

It’s calculated as follows:

Value of supply = Consideration (payment) - VAT

How is the value of supply calculated if the total payment is monetary?
If the total consideration is monetary, the value of supply will be the market value without VAT. It will also include other expenses and charges incurred by the supplier.

How is the value of supply calculated if part of the consideration is non-monetary?
If all or part of the consideration is non-monetary, the value of supply will be calculated based on the monetary portion plus the fair market value of the non-monetary portion, excluding VAT.

What reduces the value of supply?
The following factors will reduce the value of supply:

  • Discounts and deductions given to customers.
  • Subsidies granted by other GCC member states to the supplier.
What should I do if the value of supply is expressed in foreign currency?
The value of supply should be converted to BHD or the currency of the relevant state based upon the current exchange rate.

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