Bahrain VAT Law
Type
Legislative Insight
Date
7 Dec 2023
Jurisdiction
Bahrain
Taxonomy
VAT
Copyright
LexisNexis
Legal reference
Bahrain Decision No. 12/2018, Bahrain Decree-Law No. 48/2018
The Kingdom of Bahrain has applied VAT from 1 January 2019 by releasing Bahrain Decree-Law No. 48/2018 Regarding Value Added Tax. Bahrain became the third Gulf Cooperation Council (GCC) member state to introduce VAT at the standard rate of 5%, following the United Arab Emirates and the Kingdom of Saudi Arabia.The final executive regulations to Bahrain Decree-Law No. 48/2018 were released under Bahrain Decision No. 12/2018 Issuing the Executive Regulations of the Value Added Tax Law issued by Bahrain Decree-Law No. 48/2018 by the Ministry of Finance and Economy in Bahrain (MoF) at the end of 2018. Since then, businesses who supply taxable goods or services in Bahrain have been able to register for VAT, and make the necessary changes to their IT and ERP systems in order to meet the new reporting and compliance obligations.
VAT is an indirect tax on consumer spending. It is collected on supplies of goods and services as well as on imports of goods and services into Bahrain at 5%, unless the goods or services are specifically exempt from VAT or are zero-rated.