VAT in Bahrain

The representatives of the Member States of the Gulf Cooperation Council (GCC) confirmed the introduction of a formal Value Added Tax (VAT) system across all six Member States through the signing of a VAT Framework Treaty. The Treaty acts as the basis for the domestic VAT legislation in Bahrain by stipulating certain principles, which must be followed by all members, while allowing Bahrain to opt for different VAT treatments in relation to some supplies.

Impact of VAT on businesses in Bahrain
VAT will impact most industries, but in particular:

• Consumer and industrial product
• Technology, media and telecommunications
• Financial services
• Real estate

Timing of VAT introduction in Bahrain
Following the signing of the VAT Framework Treaty, all GCC members show signs of aiming
to implement local VAT systems from 1 January 2018 or at the least the first quarter of
2018. We expect that the first draft local laws may be released in the first quarter of 2017.

Standard rate of VAT in Bahrain
The VAT rate in Bahrain and all six GCC countries will be 5%. This is significantly lower than the OECD average VAT rate of approximately 19%.

For more information on the VAT Registration in Bahrain, VAT Consultant in Bahrain, VAT Expert in Bahrain contact us.