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

This transitional rule applied VAT to the post-commencement part of earlier contracts and treated consideration as VAT-inclusive where the contract omitted VAT. Temporary zero-rating for qualifying old Government contracts ended no later than 31 December 2023.

Who should read this?

Taxable Persons, finance teams and advisers applying this Article to a Bahrain VAT position.

Why does it matter?

The 31 December 2023 endpoint is historical, not an ongoing benefit for new government contracts or current supplies.

TransitionalVAT-inclusive considerationGovernment relief ended by 2023

Current text

For Supplies relating to contracts signed prior to the Law coming into force, Tax shall apply on a Supply made in full or in part after the date of the Law coming into force. Where the contract does not include a Tax clause, those Supplies shall be treated as follows: The Consideration shall be deemed inclusive of Tax if it is imposed under this Law Tax shall be calculated on the Supply, regardless of whether it was taken into account when determining the Consideration in return for the Supply. The Regulations shall specify the provisions for applying the provisions of this paragraph. Notwithstanding paragraph A of this Article, Tax shall be applied at the zero rate on Supplies related to contracts with the Government signed prior to the Law coming into force where the Supply is made in full or in part after the date of this Law coming into force, until the date of the contract's renewal, or its expiration, or 31 December 2023, whichever is earlier.

Application steps

  1. 1

    Record contract, renewal and performance dates.

  2. 2

    Separate pre- and post-commencement performance.

  3. 3

    Do not apply expired temporary government-contract relief.

Connected provisions

Direct legislative link

Regulations — Article (108)

Related Regulations Article (108)

This provision supplies the linked rule or procedure needed to apply the Article correctly.

Open connected Article

Official guides and tools

Official text

Value Added Tax Law

Article (76)

Official guide

VAT General Guide

Practical guidance relevant to the Article

Illustrative example by Madar

Historic Government contract

The temporary zero-rating for a qualifying pre-VAT Government contract cannot continue beyond the relevant expiry or renewal event or 31 December 2023.

Questions to help you apply it

  • When was the contract signed or renewed?
  • Which part was performed after commencement?