English text status

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.

Practical summary

Licensed transport of Goods or passengers by land, water or air from one Bahrain location to another is zero-rated. Exclusions include unlicensed transport, vehicle rental without driver, sightseeing or leisure transport, food delivery by the food Supplier, and transport ancillary to a standard-rated principal Supply where not separately priced.

Who should read this?

Transport, taxi, rental, restaurant, retail and delivery businesses.

Why does it matter?

Movement alone is insufficient. Licence, driver, purpose, contract and separate pricing determine treatment.

Domestic journeyLicensed providerNo driverless rental or leisure trip

Current text

A. Tax shall be applied at the zero rate on a Supply of Services for transporting Goods and passengers by land, water or air from a place inside the Kingdom to another place in the Kingdom. B. The zero rate shall not apply to the following: 1. Transportation Services provided by any Person who does not meet any regulatory or licensing requirements from the authorised body to Supply such Services. 2. Services of vehicle rental without a driver. 3. Transportation Services provided for sightseeing or leisure purposes. 4. Food delivery Services provided by a Person supplying food. 5. A transportation Service which is ancillary to the principal Supply of a Good or Service which is taxable at the standard rate and is not priced separately to the Supply of a Good.

Test the transport Service

  1. 1

    Identify Bahrain origin and destination.

  2. 2

    Verify transport licence.

  3. 3

    Distinguish transport with driver from rental.

  4. 4

    Exclude sightseeing and leisure.

  5. 5

    Identify who Supplies food delivery.

  6. 6

    Check separate pricing from the principal Supply.

Connected provisions

Thematic link

Regulations — Article (68)

International transport

International transport uses different route and evidence tests.

Open connected Article
Direct legislative link

Law — Article (53)

Local transport

This Article defines scope and exclusions.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (78)

Official guide

VAT General Guide — Version 1.15

Sector treatments

Connected Madar tools

Connected Madar tools

Tax Invoice Centre

Check the invoice route and issue deadline, and calculate VAT for a single transaction.

Illustrative example by Madar

Taxi or car rental?

A licensed taxi trip from Muharraq to Manama is local passenger transport tested for zero rating. Giving a Customer a car for a day without a driver is vehicle rental and is outside this Article.

Questions to help you apply it

  • Are both points in Bahrain?
  • Is the provider licensed?
  • Is there a driver?
  • Is the trip leisure?
  • Is transport separately priced?