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Bahrain introduces 5% VAT regime Jan 2019

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.

Key facts:

  • 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.

Preparing VAT returns For any of the Arab Gulf states can be challenging.  VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.

Arab Gulf GCC VAT implementations

2028+ Kuwait decides between VAT or excise taxes
2025? 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


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