Bahrain VAT Compliance

Bahraini VAT registration

Bahrain VAT compliance: The compulsory VAT registration threshold in Bahrain is BHD 37,000 per annum. A voluntary registration for businesses below this threshold is permitted, although this has its own minimum threshold of BHD 18,850 per annum.

There is scope for related businesses to apply for a single, Group VAT registration.

There is no threshold for non-resident businesses, which must register prior to their first supply. Foreign registrations may be either direct, or via a local Fiscal Representative.

Bahraini VAT invoices

VAT invoices must contain the following information as a minimum:

  • Date of invoice (and date of supply if different)
  • Unique, sequential invoice number
  • Tax ID number of the supplier
  • Name and address of the supplier and customer
  • Description and quantity of the goods supplies; nature of services provided
  • Gross, VAT and net values of supply
  • VAT rate applied, and explanation where not the standard rate

Invoices must be issued within 15 days following the month of supply of the taxable goods or services.

Bahraini VAT Returns

Registered tax payers must submit their periodic returns each month. Returns must be filed by the last working day of the month following the reporting period.

Penalties for non-compliance

The following penalty regime for non-compliance is in place, with financial penalties and potential prison terms:

  • BD10,000 for failure to register for VAT within 60 days of the required date
  • Failing to issue a VAT invoice within 15 days of the month following the taxable supply
  • Failing to submit a VAT return and/or pay any VAT due by the end of the month following the reporting month

Bahraini VAT Rates

Generally, Bahrain follows the terms of the Agreement, including the harmonised standard VAT rate of 5%, but has a wider range of zero and reduced VAT rates to provide subsidies to the less well off in society.
The current rates are:

Bahrani VAT rates

Rate Type Which goods or services
5% Standard From 1 Janyuary 2019: All other supplies of goods or services, including imports, in accordance with the Unified VAT Agreement.
% Zero Basic foodstuffs; domestic and international transport; new properties; healthcare; exports of goods and services; high-value metals; oil and gas; education; and medicine and medical equipment.
% Exempt: Sale and lease of real estate; and financial services.