English translation published by the NBR in its bilingual Regulations file (marked unofficial). The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.
An expense incurred by a Taxable Person in own name and recovered from another Person is taxable. The exception is an expense incurred directly in the other Person's name, which is paid on that Person's behalf.
Professional firms, agents, contractors and teams recharging travel, fees and expenses.
An at-cost recharge is not automatically outside VAT. Ask whose name created the expense and who owed the original Supplier; separate a recharge from a true payment on the Customer's behalf.
Current text
Recharge or payment on behalf?
- 1
Check name on original invoice or fee.
- 2
Identify debtor to original Supplier.
- 3
Did Taxable Person receive benefit first?
- 4
Link recharge to main Supply treatment.
- 5
For payment on behalf, retain Customer-name evidence.
- 6
Show both clearly in invoice and books.
Connected provisions
Official guides and tools
Connected Madar tools
Hotel in firm name and government fee in client name
A consulting firm recharges a BHD 100 hotel invoice in its own name; the at-cost amount enters its Supply. A government fee issued directly in the client's name and paid by the firm can enter the exception test.
Questions to help you apply it
- Whose name?
- Who owed Supplier?
- Who benefited first?
- Part of main Service?