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Bahrain Announces Registration Requirements for VAT — Orbitax Tax News & Alerts

Bahrain's Ministry of Finance issued a release on 28 November 2018 announcing that large companies are required to register for value added tax (VAT) before 1 January 2019, which is the date Bahrain's new VAT regime will be implemented. For the first phase of implementation, the registration requirement applies for companies with annual sales exceeding BHD 5 million. The registration threshold is to be subsequently reduced to BHD 500,000 from 1 July 2019 and ultimately to BHD 37,500 from 1 January 2020.

Bahrain's VAT regime is in line with the Gulf Cooperation Council (GCC) VAT agreement, with a standard 5% rate and certain zero-rated and exempt supplies. Zero-rated supplies include:

  • Basic food items (basic goods list);
  • Education;
  • Health (including pharmaceuticals and all medical supplies);
  • Real estate (construction of new buildings);
  • Local transport; and
  • Oil and gas (and their derivatives).

Exempt supplies include:

  • Lease or sale of real estate; and
  • Financial services (excluding what is paid as an explicit fee or commission or commercial discount charged by financial institutions).

Click the following link for the VAT webpage published by the Ministry of Finance for more information.