Bahrain’s NBR has recently issued a public clarification (
VAT/PC/19/2) about VAT liability of fees earned by board members or directors in carrying out their duties as board members of a company, governmental organization, institution or similar body. Broadly, the Guide covers the following points:
- Remuneration for services as a board member is outside the scope of VAT;
- Other functions(not core duties) exercised in an independent way on behalf of an entity of which they are a board member is considered to be an economic activity and may have to account for VAT;
- A third party who, as part of its business and in consideration for a fee, acts or arranges for another person to act as a board member will be considered to be acting independently and engaged in an economic activity may have to account for VAT;
- A legal person exercising its shareholder rights to appoint a board will not be within the scope of VAT.
To read the complete public clarification, please find the enclosed file
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