Bahrain: Status of planned increase to VAT rate
Tax authority yet to issue transitional rules for a VAT rate increase
Tax authority yet to issue transitional rules for a VAT rate increase
The value added tax (VAT) rate is expected to increase to 10%, effective 1 January 2022. However, the tax authority (the National Bureau for Revenue) has yet to issue transitional rules for a VAT rate increase.
There are less than 30 business days to the proposed effective date for the VAT rate increase.
KPMG observation
There are some steps that business can take to prepare for the planned VAT rate increase.
Businesses may have taken VAT costs less seriously because a VAT rate of 5% (or the inability to claim input VAT) may not have a material effect on their finances. However, with the rate set to double, VAT may become a material consideration for most businesses because errors and the inability to claim input VAT would have significant implications.
Read a November 2021 report [PDF 203 KB] prepared by the KPMG member firm in Bahrain
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