Bahrain VAT 10% Explained
Bahrain doubled its VAT rate from 5% to 10% on 1 January 2022 under Law No. 33 of 2021 - the second GCC state after Saudi Arabia to move beyond the original 5% baseline. The National Bureau for Revenue (NBR) administers it. Here is what the 10% rate covers, who has to register, and the transitional rules that still cause invoice disputes four years later.
The rate change of 2022
VAT was introduced in Bahrain on 1 January 2019 at 5% under Law No. 48 of 2018. On 1 January 2022, Law No. 33 of 2021 raised the standard rate to 10%. The transitional rules in the implementing regulation specified that contracts straddling the change date apply 5% to supplies delivered before 1 January 2022 and 10% afterward, regardless of when the contract was signed. This still appears on audit findings: businesses that pre-billed at 5% for services delivered after the change date were assessed the additional 5% as a liability.
Who registers
Mandatory registration above BHD 37,500 annual taxable supplies. Voluntary registration above BHD 18,750. Registration is via the NBR portal. The 10% rate replaces 5% for all supplies after 1 January 2022 - there is no transitional 'small business' lower rate. Returns are quarterly for most; monthly for large taxpayers.
Zero-rated and exempt categories
Zero-rated supplies in Bahrain include international transport, exports outside the GCC, basic food items (a relatively long list compared to other GCC states), oil and gas sector, and the construction of new buildings. Exempt include local financial services, residential rental, and bare land sales. The basic-food zero rating is a Bahrain-specific feature reflecting cost-of-living considerations - check NBR's published list of zero-rated goods, it has been amended several times.
How to calculate
Add VAT: multiply by 1.10. BHD 100 net + 10% = BHD 110. Extract: divide by 1.10. BHD 110 inclusive contains BHD 10 of VAT. The 10% rate is the easiest GCC math: shift the decimal one place. BHD 100 has BHD 10 of VAT. BHD 1,000 has BHD 100 of VAT. Watch for fils-level rounding on small invoices - Bahrain uses 3 decimal places (1 BHD = 1000 fils), and some POS systems still round at 2 decimal places, leading to small discrepancies.
What changed in the rate increase
Beyond the 5% to 10% headline, the rate change brought tighter timing rules. The 'tax point' (when VAT is due on a supply) is now strictly the earliest of: invoice date, payment date, or supply date. This rules out the common pre-2022 trick of dating invoices late to slide under the old rate. NBR also expanded its audit programme; expect requests for source documents within 30 days.
Common questions
When did Bahrain raise VAT to 10%?
On 1 January 2022 under Law 33 of 2021. The original 5% rate had been in place since 1 January 2019 under Law 48 of 2018.
Are basic food items zero-rated?
Yes, NBR maintains a published list. The list has been amended; check the current version before relying on it.
Is there reverse charge in Bahrain?
Yes, for imports of services from non-resident suppliers, similar to other GCC states.
What is the registration threshold?
BHD 37,500 mandatory, BHD 18,750 voluntary, based on annual taxable supplies.
Source
For official figures and the latest text of the law: National Bureau for Revenue (NBR). We update this page when published rates change. For high-stakes decisions, verify against the official source.