When Reverse Charge Applies
✅ Foreign supplier provides services to Bahrain VAT-registered customer
✅ Foreign supplier provides goods assembled/installed in Bahrain
✅ Import of digital services from non-resident provider
❌ Does NOT apply if foreign supplier has registered for BAhrain VAT
❌ Does NOT apply to import of physical goods (handled at customs)
📌 Accounting Treatment
The buyer accounts for both output VAT and input VAT on the same return. If the buyer makes only taxable supplies, the net effect is zero — output and input cancel out. If the buyer makes exempt supplies, only partial input recovery, creating a real cost.