Value Added Tax (VAT) in the Kingdom of Bahrain

A standard rate of 10% Value Added Tax (VAT) has been applied in the Kingdom of Bahrain from 1 January 2022. The National Bureau for Revenue (NBR) is the government entity responsible for implementing and collecting VAT in Bahrain. Certain goods and services will be subject to a zero rate (0%) of VAT, and others will be exempt from VAT.

VAT was first introduced in the Kingdom on 1 January 2019.

All entities or individuals conducting an economic activity independently to generate income and make annual supplies exceeding the mandatory threshold of BHD 37,500 are required to register for VAT purposes and are required to be registered with the National Bureau for Revenue (NBR) to obtain a VAT registration certificate and a dedicated VAT account number to start collecting the 10% VAT.

As a large business or a small or medium business, you must be registered with the National Bureau for Revenue (NBR) to obtain a registration number and a registration certificate to start collecting the 10% VAT.

The end consumer bears the VAT cost when purchasing goods or services from the business registered for VAT (VAT payer). In return, the VAT payers pay VAT collected from the end consumer to the NBR and recover the VAT paid to the suppliers.

How does VAT work?

Preparing your Business

The readiness of your business for VAT depends on its size and the amount of its annual VAT-able supplies. The National Bureau for Revenue (NBR) provides readiness steps for small, medium and large businesses.

If your business has an annual VAT-able supplies that do not exceed 3 million Bahraini Dinars, then your business is defined as an SME (Small & Medium Enterprises) and is recommended to follow these steps.

If your business has an annual VAT-able supplies that exceed 3 million Bahraini Dinars, then you are defined as a large business and are recommended to follow these steps.

VAT Returns and Filing

As a VAT-registered business, you are required to submit a VAT return with details of your business transactions subject to VAT sales and purchases. A VAT Return summarizes the value of the supplies and purchases a VAT payer has made during the VAT period and shows the VAT payer’s Net VAT position.

Registered VAT payers must file and submit their VAT returns through the NBR online portal.

National Bureau for Revenue eService Portal

For detailed steps on filing, please refer to the "VAT return filing page".

If the NBR has not received your VAT return within the specified filing period, NBR has the right to estimate your VAT return following the provision of Article (36) of the VAT law (PDF, 821KB, 56 Pages).

You can easily settle your business' outstanding VAT dues online via the VAT Bill Payment Service or through the Fawateer service. For any suggestions & inquiries you may reach out to the National Bureau for Revenue (NBR)