VAT is in force in Bahrain from 1st January 2019.
In accordance with the Unified Agreement for Value Added Tax of the Cooperation Council for the Arab States of the Gulf, Decree-Law No. (48) for the year 2018 regarding Value Added Tax, e-commerce of goods in Bahrain falls under 10% VAT.
VAT registration for non-residents
Transactions where a non-resident supplier ships goods from another country to a Bahraini customer (private individual) are not considered as a supply leading to an obligation to register for VAT in Bahrain.
If the buyer is registered in the Bahrein business, a reverse charge mechanism may apply. In case the purchase of goods relates to taxable activities, such a business can credit import VAT in its tax return.
The only situation when a non-resident business must be registered for VAT in Bahrein is when a business uses a local warehouse to store goods for B2C sales.
VAT Standard rate
The standard VAT rate in Bahrein 2022 is 10% (5% – before 1 January 2022).
VAT Reduced rate
0% – for some food items, medical equipment, goods for kids, precious metals, and gems.
Non-Residents are obligated to register for VAT in Bahrain within 30 days from the first taxable supply to non-taxable persons in Bahrain, Vat threshold is zero.