Bahrain: VAT rate increase to 10% is finalized

The VAT rate increase is effective 1 January 2022.

The VAT rate increase is effective 1 January 2022.

Legislation to increase the value added tax (VAT) rate to 10% (from 5%) has been approved and finalized.

The VAT rate increase is effective 1 January 2022. However, there is a transition period of one year, ending 31 December 2022. During this transition period, suppliers will charge 5% VAT on standard-rated supplies, subject to certain conditions. The transitional rules are mandatory (and not optional) when the specified conditions are met.

The Bahrain National Bureau for Revenue in connection with the VAT rate transitional provisions issued a guide and a set of “frequently asked questions” (FAQs).

Read a December 2021 report [PDF 122 KB] prepared by the KPMG member firm in Bahrain


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