Bahraini VAT rates and VAT compliance

Certain transactions and entities are exempt from VAT in Bahrain, including:

• Some financial services
• Residential real estate (first supply)
• Bare land
• Certain education and healthcare services (depending on conditions)

A valid Bahraini VAT number is required for any business (resident or non‑resident) undertaking taxable supplies in Bahrain.

• Resident businesses must register when their annual taxable supplies exceed BHD 37,500 (or are expected to exceed that) or may register voluntarily if above BHD 18,750.
• Non‑resident businesses must register for VAT if they make taxable supplies in Bahrain (no threshold).
• After registration, the business must apply the correct VAT treatment (charge VAT, issue tax invoices, maintain records, file returns).
   

Get more information on VAT registration in Bahrain.

VAT‑registered businesses in Bahrain are required to submit periodic VAT returns.

• Returns must be filed for each tax period (typically monthly; quarterly filing may apply for smaller businesses under certain thresholds).
• The return must be filed electronically through the NBR portal.
• VAT payment is due at the same time as the return.
• If input VAT exceeds output VAT, the excess may be carried forward or claimed for refund, subject to conditions. 

Get more information on VAT returns in Bahrain.

When making taxable transactions, a Bahraini VAT invoice must include:

• Date of invoice
• Date of supply (if different from the invoice date)
• Unique, sequential invoice number
• Supplier name, address, and VAT registration number
• Customer name and address
• Description of goods or nature of services supplied
• Quantity of goods (if applicable)
• Value of the supply exclusive of VAT
• VAT rate(s) applied
• VAT amount charged
• Total amount inclusive of VAT
• Exchange rate used, if invoicing in a currency other than Bahraini dinar (BHD)
• Clear indication if the supply is zero‑rated or exempt

A simplified tax invoice option may be used when the customer is not VAT‑registered or when the invoice value (including VAT) does not exceed BHD 500

Non-resident businesses that are required to register for VAT in Bahrain must appoint a fiscal representative. The fiscal representative must be resident in Bahrain and approved by the NBR. 

The representative is jointly and severally liable for the VAT obligations of the non-resident business. This includes filing returns, making payments, and ensuring full compliance with Bahraini VAT law.

There is no threshold exemption — as soon as a non-resident makes taxable supplies in Bahrain (e.g., B2C services or goods without reverse charge), registration and appointment of a fiscal representative are required.

Bahrain imposes VAT at the standard rate of 10% on digital, telecommunications, and broadcasting services supplied to individuals and non-VAT-registered customers in Bahrain.

The Bahraini VAT registration thresholds for digital services are the same as the standard thresholds.

Examples of taxable digital services include:

• Streaming services
• Online advertising
• Downloadable software and apps
• Cloud storage
• E-learning and digital publications

B2B supplies of digital services from non-resident businesses to VAT-registered businesses in Bahrain are generally subject to the reverse charge mechanism, meaning the Bahraini business accounts for the VAT.