The standard rate increased from 5% to 10% with effect from 1 January 2022. The rule requiring VAT-inclusive advertised prices did not change. Under the transitional rule in Article 4 of Law No. 33 of 2021, 5% continued to apply to a supply or import performed under a contract concluded before the Law took effect until the contract expired, was amended or renewed, or one year passed from 1 January 2022, whichever came first; NBR Chief Executive Decision No. 1 of 2021 set the procedures. The rule no longer affects new supplies but remains relevant when 2022 and earlier periods are examined within the five-year limitation period (Article 65).
Law No. (33) of 2021 and the government English translation of the VAT Law. The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.
The standard VAT rate is 10%, unless a Supply or Importation is exempt or zero-rated. Prices advertised in Bahrain's domestic market must also include the VAT due.
VATable suppliers and businesses that advertise prices for Goods or Services in Bahrain.
Confirm the VAT treatment first, apply the correct rate, and show the final VAT-inclusive price to the customer.
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Text before the amendment
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Before calculating VAT
- 1
Check whether the Supply is standard-rated, zero-rated or exempt.
- 2
Where the standard rate applies, calculate VAT at 10% of the value of the Supply or Importation.
- 3
When advertising in the domestic market, display the VAT-inclusive price in line with the Regulations.
- 4
Keep a record of the basis used to determine the VAT treatment.
Connected provisions
Official guides and tools
Calculating the final price
If an item costs BHD 100 before VAT and is subject to the standard rate, VAT is BHD 10 and the final advertised price is BHD 110.
Questions to help you apply it
- Is the Supply zero-rated or exempt under a specific rule?
- Does the displayed customer price include VAT?
- Did the transaction take place after the 10% rate became effective?