5% Value Added Tax (VAT) has been applied in the Kingdom of Bahrain from 1 January 2019. The National Bureau for Revenue  (NBR) is the government agency responsible for implementing and managing VAT in Bahrain. The system is responsible for recording VAT and related obligations, validating the submitted statements, and evaluating such matters. The National Bureau for Revenue shall also reimburse the recoverable amount, collect any outstanding amounts, and perform audits. In addition, the authority is responsible for considering and issuing decisions related to grievances and following up and implementing compliance with VAT on an ongoing basis.

• Decree (48) of 2018 Regarding Value Added Tax

The final consumer pays VAT when purchasing any goods or services subject to the tax. In turn, companies pay VAT collected from the final consumer to the National Bureau for Revenue and recover the added value paid to its suppliers.

VAT will not be imposed on the following goods:

• Basic food products
• General medical services
• Passenger transport services
• Oil and gas sector
• International air tickets

Value added tax is applied to each stage of the supply chain from production to the final sale of the product or service. The tax is collected from taxable businesses registered with the National Bureau for Revenue , where the final consumer pays the tax. Therefore, it is considered an indirect tax.

The final consumer pays VAT when purchasing any goods or services subject to VAT. In turn, companies pay VAT collected from the final consumer to the national income agency and recover VAT paid to its suppliers.

Source: National Bureau for Revenue

The Kingdom of Bahrain began to gradually apply VAT as of January 2019. Companies and businesses are required to register with the The National Bureau for Revenue (NBR) in order to obtain a tax number and tax registration certificate. VAT registration is phased in so that companies within specific annual supply categories are required to register within specified time periods. All companies and institutions that have reached or are expected to reach annual supplies of between BD37,500 (minimum mandatory limit) and BD500,000 must register for value added tax by 20 December 2019.

Tourists and other visitors to Bahrain may request VAT refunds on purchases made within the Kingdom. A refund may be filed at one of the designated desks at Bahrain International Airport. Tourists may receive the VAT refund in cash, or it can be transferred to their credit card accounts electronically if the eligibility conditions for are met:

• The goods are purchased during the Tourist’s stay in the Kingdom
• The purchased goods fall under the list of goods eligible for VAT refunds and are acquired for personal use
• The goods are purchased from one of the authorized merchants registered for the scheme 
• The tourist leaves the Kingdom of Bahrain within two months from the date of supply of the goods

For more information about VAT, please call our 80008001 hotline number, which is available 24 hours a day, seven days a week.

• Executive Regulations of the Value Added Tax Law
• Summary of Executive Regulations of the Value Added Tax Law
• List of basic food products not subject to 5% VAT
• Common VAT Agreement of the States of the Gulf Cooperation Council (GCC) (common VAT agreement framework), (Arabic only)
• VAT Law of the Kingdom of Bahrain  (Arabic only)

The Kingdom of Bahrain introduced a Excise Tax system on December 30, 2017. This is a tax imposed on specific goods harmful to human health and the environment. The aim of the tax is to discourage citizens from consuming products that are harmful to health. Excise Tax revenues contribute to the treatment of diseases resulting from the consumption of these products.

Excise Tax are imposed on the retail price of the following products:

• Soft drinks
• Energy drinks
• Tobacco and its derivatives

Excise Tax rates

The tax rates are applied as follows:

Source: Ministry of Finance and National Economy

The Ministry of Finance and National Economy is responsible for registering importers and producers of Excise goods. Manufacturers of Excise goods, selective importers, and storage companies are required to opt for Excise Tax. Registration for the tax is completed by filling the application form and sending it with the required documents by email to: taxwg@mofne.gov.bh

Legislation and decisions on Excise Tax

• Law No. 40 of 2017 on selective taxation  (Arabic only)
• Law No. (39) for the year 2017 on the ratification of the unified agreement on selective taxation by the GCC countries  (Arabic only)
• Decree No. (17) for the year 2017 on the issuance of regulations to implement Law No. 40 of 2017 on selective taxation  (Arabic only)

More information on selective taxation, 

• Excise goods list
• Licensing for tax warehouses
• Refunding of selective tax
• Applied procedures
   

For any inquiry or complaint, contact the Ministry of Finance and National Economy through the "Tawasul " system, or via email to: taxwg@mofne.gov.bh.