The Kingdom of Bahrain applied value added tax (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 (MoF) in Bahrain 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 information technology (IT) and enterprise resource planning (ERP) systems in order to meet the new reporting and compliance obligations.