Indirect tax snapshot
Value Added Tax (VAT) was implemented in the Kingdom of Bahrain on 1st January 2019 at the standard rate of 5%.
The National Bureau for Revenue (NBR) is the regulating body responsible for implementing and collecting VAT in Bahrain.
Certain goods and services such as basic food items, transportation services, health care, education, construction of new buildings, oil and gas etc. are subject to VAT at zero-rate (0%), while certain services such as financial services, real estate, supply of land and buildings etc. are exempt from VAT.
Export of goods and services are subject to VAT at zero-rate (0%).
From 1st January 2022, the standard rate of VAT was increased from 5% to 10%. This initiative may have been taken due to the impact in the economy on account of Covid-19.
The transitional rules permit the applicability of VAT @5% upto 31st December 2022 subject to specified conditions. It also allows pro-rated VAT rate of 5%/10% for specified contracts.
The VAT treatment for supplies which were subject to VAT at 0% or exempt remains unchanged.
Specific guidelines have been issued for different sectors to bring clarity in the treatment and applicability of VAT Law.
For further information on indirect tax in Bahrain please contact:
Suresh Nandlal Rohira
T +973 17 500 188