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The Kingdom of Bahrain remained free of taxes till 31-12-2018. From 01-01-2019 VAT was implemented. Except for VAT, there is no tax burden on Bahraini nationals, citizens, and corporations (except companies engaged in exploration, production, or refining of hydrocarbons which is 46% of the annual profit).
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VAT Rate in Bahrain:
From 01-01-2019 to 31-12-2021, the VAT rate in Bahrain remained 5%. Due to the severe economical impact of the COVID-19 pandemic globally, the Kingdom raised the VAT rate.
Since January 1st, 2022 the VAT rate in Bahrain is 10%.
Who should register for VAT?
The National Bureau for Revenue (NBR) defined the VAT registration criteria on the basis of a business’s annual supplies (value of sales and/or services provided in a 12-month period). According to National Bureau for Revenue (NBR), the following is the criteria for VAT registration:
Annual Supplies in next 12 months | VAT Registration Criteria |
| Less than BHD. 18,750 | Not Eligible |
| Between BHD. 18,750 and 37,500 | Eligible for Voluntary Registration |
| More than BHD. 37,500 | Mandatory Registration |
*Companies that anticipate their annual supplies of more than 37500 in the next 12 months must register for VAT. Otherwise, they may face penalties up to BHD 10,000.
VAT implementation dates in Bahrain:
Implementation of 5% VAT: From 01-01-2019.
Implementation of 10% VAT: From 01-01-2022.
Documents required for VAT registration in Bahrain
For VAT registration in Bahrain following are the required documents:
- Copy of CR (e-Certificate).
- Copy of e-Extract.
- Copy of applicant CPR.
- Audited financial report for last financial year (for companies more than 2 years old).
- Monthly sales from the date of incorporation to date.
- Business plan with a clear forecast of next 12 months taxable, zero-rated, and exempt supplies.
- Explanation of exempt and zero-rated supplies on company’s letterhead (if any).
- Purchase and Sales invoices, contracts, and other supporting documents proving registration eligibility.
- IBAN certificate or Bank Statement.
- Letter from company mentioning the contact person details such as Name, CPR, Phone & Email address.
Request a call back for your business setup in Bahrain
- September 2, 2021
- Commercial name of PI Business Solutions has been changed to PI Startup Advisory.
- September 25, 2021
- Bahrain allows 99% foreign ownership for the Trade Sector.
- January 1, 2022
- Taxes in Bahrain & VAT | Simplified.
