TL;DR — the key facts
What you need to know
Bahrain doubled its VAT rate from 5% to 10% in January 2022. The NBR administers registration, returns, and audits. Most supplies are standard-rated; financial services and residential property are exempt.
Every VAT tax invoice in Bahrain must contain specific fields. Simplified invoices are allowed for supplies under BHD 500 to non-VAT-registered customers.
Timeline
January 2019
VAT introduced in Bahrain at 5%.
January 2022
VAT rate doubled from 5% to 10%.
VAT and invoicing compliance
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10%, raised from 5% in January 2022. Standard rate applies to most goods and services. Zero-rate applies to exports, international transport, and certain food items. Financial services and residential property are exempt.
Any business with taxable supplies or imports exceeding BHD 37,500 in the previous 12 months, or expected to exceed that in the next 12 months, must register. Voluntary registration is available at BHD 18,750.
No — there is no general corporate income tax in Bahrain. Only oil, gas, and hydrocarbon companies pay income tax (at 46%). Most businesses, including foreign-owned companies, pay no income tax.
Supplier name, address, and VAT Account Number; customer name and address; unique sequential invoice number; date; description of goods or services; quantity and unit price; subtotal; VAT amount (10%); and total amount including VAT.
Quarterly for most businesses. Monthly returns are required if your annual taxable supplies exceed BHD 3 million. Returns are due by the end of the month following the quarter or month end.
