Bahrain has become the third of six Gulf Cooperation Council (GCC) states to implement a 5% VAT regime. The six states agreed in 2018 to form a VAT and Customs union, similar to the European Unions.
- Phased 3-stage registrations in 2019 of eligible companies depending on turnover;
- Group registrations permitted
- Exempt: financial services; real estate transactions
- Zero-rated: exports; basic foodstuffs; education; oil and gas; international transport; new building construction; healthcare
- Monthly VAT returns if annual turnover exceeds BHD 3million; otherwise quarterly
- Non-residents not obliged to appoint Fiscal Representatives
So far, only United Arab Emirates and Saudi Arabia have introduced VAT, both on 1 January 2018. The Bahrain VAT Law differs from the UAE and Saudi Arabia (KSA), in particular around the zero-rating and VAT exemption provisions – basic food items, the construction of new buildings, education and healthcare services, local transport services, as well as oil and gas and derivatives.
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Arab Gulf GCC VAT implementations
|2023||Kuwait decides between VAT or excise taxes|
|2023||Qatar delays VAT on inflation worries|
|Jan 2022||Bahrain doubles VAT to 10%|
|16 Apr 2021||Oman introduces 5% VAT|
|1 Jul 2020||Saudi Arabia trebles VAT to 15%|
|1 Jan 2019||Bahrain launches 5% VAT regime|
|1 Jan 2018||Saudi Arabia and UAE introduce 5% VAT regime|
|2016||VAT and Customs Union agreement: Bahrain; Kuwait; Oman; Qatar; Saudi Arabia; UAE United Arab Emirates|