What changed?

The standard rate increased from 5% to 10% with effect from 1 January 2022. The rule requiring VAT-inclusive advertised prices did not change.

English text status

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.

Practical summary

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.

Who should read this?

VATable suppliers and businesses that advertise prices for Goods or Services in Bahrain.

Why does it matter?

Confirm the VAT treatment first, apply the correct rate, and show the final VAT-inclusive price to the customer.

10% standard rateVAT-inclusive priceEffective from 1 January 2022

Current text

Tax shall be imposed at the standard rate of ten per cent (10%) of the value of the Supply or Importation, unless this Law specifically provides for an exemption from Tax or for the application of the zero rate. The advertised price of Goods and Services in the domestic market shall include the Tax due, in accordance with the conditions and rules specified by the Regulations.

Text before the amendment

From Jan 1, 2022Currently in force
Until Dec 31, 2021Previous text
Show previous text
Tax shall be imposed at the standard rate of five per cent (5%) of the value of the Supply or Importation, unless this Law specifically provides for an exemption from Tax or for the application of the zero rate. The advertised price of Goods and Services in the domestic market shall include the Tax due, in accordance with the conditions and rules specified by the Regulations.

Before calculating VAT

  1. 1

    Check whether the Supply is standard-rated, zero-rated or exempt.

  2. 2

    Where the standard rate applies, calculate VAT at 10% of the value of the Supply or Importation.

  3. 3

    When advertising in the domestic market, display the VAT-inclusive price in line with the Regulations.

  4. 4

    Keep a record of the basis used to determine the VAT treatment.

Connected provisions

Direct legislative link

Regulations — Article (2)

VAT-inclusive prices

It sets out the exceptions and rules for advertising prices inclusive of VAT.

Open connected Article

Official guides and tools

Official page

VAT Treatments and Policies

Standard-rated Supplies

Official guide

VAT General Guide

General rules and VAT rates

Illustrative example by Madar

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?