VAT Rates

Here you would know the basics and essentials on the workings of VAT in Bahrain. This is a must read and educative knowledgebase for those new to applying VAT within an Organization.
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VAT Rates

Fri Oct 12, 2018 6:04 am

What are the VAT rates in the education sector?

Nursery education and pre-school education 0 %
Private and public school education (excluding higher education) 0 %
Supply of goods and services (for example, books) 0 %
Higher education owned or 50% funded by the government 0 %
Education provided by private higher educational institutions 5 %
Supply of goods and services to private higher educational institutions 5 %
Exam fees 0 %
School uniforms 5 %
Stationery 5 %
Electronic equipment (such as tablets or laptops) 5 %
Renting of school grounds for events 5 %
Fees for activities after school 5 %
Activities supplied after school by teachers without any extra charge 0 %
School trips for educational purposes within the curriculum 0 %
School trips for recreation 5 %
School trips not within the curriculum 5 %

What are the VAT rates for oil and gas?

Crude oil and natural gas 0 %
Other oil and gas products, including petrol at petrol stations 5 %

What are the VAT rates in the transportation sector?

Domestic passenger transportation Exempt
International transportation of passengers and goods 0 %
Supply of a means of transport for the commercial transportation of goods 0 %
and passengers

What are the VAT rates for financial services?

Margin-based products (products not having an explicit fee, commission, Exempt
rebate, discount or similar)
Products with an explicit fee, commission, rebate, discount or similar 5 %
Interest on forms of lending (including loans, credit cards, and finance leasing) Exempt
Issue, allotment or transfer of an equity or debt security Exempt

What are the VAT rates for investment metals (gold, silver and platinum) and Jewelry?

>= 99% pure and tradable in global markets Exempt
< 99% pure 5 %
Jewelry 5 %

What are the VAT rates for insurance and reinsurance?

Insurance and reinsurance (including health, motor, property, etc) 5 %
Life insurance and life reinsurance Exempt

What are the VAT rates for food and beverages?

Food and beverages are taxed at 5%.

What are the VAT rates for telecommunications and electronic services?

Wired and wireless telecommunications are taxed at 5%.

What are the VAT rates for government services?

Sovereign activities which are not in competition with the private Outside VAT System
sector undertaken by designated government bodies
Activities that are not sovereign or are in competition with the private sector Depends on Goods and Services

What are the VAT rates for nonprofit organizations?

Activities of foreign governments, international organisations, diplomatic bodies and missions acting as such (if not in business in the BAHRAIN)
Considered outside VAT system

Charitable activities undertaken by societies and associations of public welfare which are listed in the Cabinet Decision
Considered outside VAT system

Activities of other not-for-profit organizations (not listed in the Cabinet Decision), which are not business activities
Considered outside VAT system

Business activities undertaken by the above organizations
VAT rate dependent on good/service, regardless of provider

How does VAT affect activities undertaken by employees in the course of their employment, including salaries?
These activities and payments are out of the scope of VAT.

How does VAT affect supplies between members of a single tax group?
These supplies are out of the scope of VAT.

What are the VAT rates for secondhand goods, antiques and collector’s items?
Secondhand goods (including cars sold by retailers), antiques, and collections are taxed at 5% of the profit margin.

Is online shopping taxable?
Yes, online shopping is taxed at 5%.

How is VAT calculated with discounts?
VAT is calculated on the discounted price of the product.

Are loans and other processing charges subject to VAT?
Loans are not subject to VAT under BAHRAIN, but the processing charges are subject to 5% VAT.

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