English text status

English translation published by the Legislation and Legal Opinion Commission. The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.

Practical summary

A Member State is treated as non-Implementing where its domestic tax legislation treats Bahrain as non-Implementing and it has not fully complied with the Agreement. It is then treated as outside GCC territory and its residents as residents outside that territory. In practice, unless the NBR announces that a Member State is Implementing, it is treated as outside GCC territory (Regulations Article (111)).

Who should read this?

Businesses dealing with suppliers and customers in GCC States.

Why does it matter?

Implementing-State status affects place of supply, exports and reverse charge and must be based on official status at the transaction date.

Two cumulative conditionsOutside GCC territoryOfficial-status check

Current text

For the purpose of applying this Law, any Member State shall be treated as a non-Implementing State if its local tax legislation includes the treatment of the Kingdom as a non-Implementing State and it does not comply fully with the provisions of the Agreement, and shall be treated in such case as a State outside The Council state territory and the Supply of Goods and Services from these states shall also be treated as a Supply from a state outside the council state territory. Resident Persons of those states shall be subject to the same treatment as residents of states outside he Council state territory.

Application steps

  1. 1

    Check NBR's announcement and the state's relevant status.

  2. 2

    Reassess place of supply and customer or supplier capacity.

  3. 3

    Retain the official status evidence used.

Connected provisions

Direct legislative link

Regulations — Article (111)

Treatment of non-Implementing States

The NBR announces which Member States are Implementing; absent that announcement, a State is treated as outside GCC territory.

Open connected Article

Official guides and tools

Official text

Value Added Tax Law

Article (79)

Official guide

VAT General Guide

Practical guidance relevant to the Article

Illustrative example by Madar

Supplier in a non-Implementing GCC State

Where the State is officially treated as non-Implementing, its supplier may be treated as outside GCC territory for the relevant place-of-Supply and reverse-charge analysis.

Questions to help you apply it

  • Was the state Implementing at the relevant time?
  • How does that status affect this supply?