VAT Treatment and Policies
Disclaimer
This list is intended to provide general information only, and contains the current views of the National Bureau for Revenue on its subject matter. This list should be used as a guideline only.
This list is not legally binding, and does not commit the National Bureau for Revenue or any VAT payer in respect of any transaction.
VAT payers may contact the National Bureau for Revenue for advice, or a ruling, on any specific transaction or transactions. This list is not a substitute for obtaining competent legal advice from a qualified professional advisor.
Different types of VAT treatments and policies can be applied depending on the nature of the good or service.
Standard rated items: 5% VAT will be applied on these goods and services
Zero-rated items: Supplies are subject to VAT, but the VAT rate charged is 0%, associated Input VAT may be deducted
Exempt items: Supplies on which no VAT is charged and for which associated Input VAT may not be deducted
Out of scope items: Supplies which are kept out of the ambit of VAT
Below are examples of items that fall within the above treatments:
Zero-rated (0%)
- Food items listed in the GCC list of basic food items
Standard rated (5%)
- Restaurants and coffee shops
Zero-rated (0%)
- Educational services provided by kindergartens, pre-primary, primary, secondary and higher education institutions
- Subscription, application and administration fees
- Printed and digital books directly related to the curriculum
- Student accommodation provided by the educational institution
- Activities and trips organised if these directly relate to the curriculum
Standard rated (5%)
- Professional education
- Vocational training provided by an educational institution that is not a licensed polytechnic educational institution
- School uniforms
- Stationery
- Activities organised by educational institutions for recreational purposes
- Electronic devices supplied by the institution
- Food and beverages offered at the institutions
Out of VAT scope
- Educational services provided free of charge at government schools
Zero-rated (0%)
- General medical health services*
- Specialist medical health services, including surgery*
- Dental services*
- Services related to the treatment of mental illnesses*
- Occupational or surgical health services*
- Speech therapy*
- Physiotherapy provided*
- Sight and hearing tests*
- Nursing care*
- Services to diagnose an illness (incl. the analysis of samples and x-rays*)
- Vaccinations*
- Health testing and screening that is undertaken under a local law, documented policy or contractual obligation*
- Cosmetic procedures provided as part of a medical condition
- Drugs, medicines, bandages and other medical consumables* (if included in the lists of zero-rated products as defined by the National Health Regulatory Authority**)
- Laboratory services*
- Transport services for patients or those injured
- Accommodation and catering services*
- Mortuary services*
- Medical consultations provided remotely by electronic communications
*If provided by a qualified medical professional or qualified medical institution
**Please visit the National Health Regulatory Authority’s
website for additional information regarding zero-rated
medicines,
medical devices and
health products.
Standard rated (5%)
- Cosmetic procedures
- The supply of food and beverages to any person who is not a patient
- Parking and valet services
- Telephone, internet and electronic services, including TV rental services
- Accommodation provided to any person who is not a patient
Out of VAT scope
- Healthcare services provided free of charge at government hospitals
Exempt
- Interest payments on loans (e.g., credit card, personal loans, mortgages, auto-loans, etc.)
- Currencies trading
- Investment fund services (e.g., issuance of, stocks, bonds and derivatives)
- The issue or transfer of ownership of securities (equities or debt)
- Life insurance and reinsurance contracts
- Interest earnings received on bank deposits
Standard rated (5%)
- General insurance
- Fees paid on remittances and money transfers
- Fees paid on issuance of cheque books
- Brokerage and intermediary services (e.g., agency services for trading securities)**
- Discretionary asset management (e.g., private banking-type services)**
**When remunerated by way of a fee or commission (e.g., transaction fee, management fee, both fixed and variable)
Zero-rated (0%)
- Gasoline for vehicles
- Diesel fuel for vehicles and generators
- Motor oil
- Gas for cooking oven
Construction of new buildings
Zero-rated (0%)
- Construction services, including:
- Construction works
- Site clearance services
- A new extension to an existing building
- Services provided by engineers and surveyors for supervisory purposes
- Goods supplied as part of the construction services where the goods are used, installed or incorporated into the building or its location, including:
- Building materials – e.g., bricks
- Fixtures and equipment to the extent that these are permanently affixed to the building and cannot be removed without causing damage
- Goods supplied to conduct civil engineering works
- Goods supplied to connect the building to a water supply and telecommunications services
- Photovoltaic cells and equipment to produce electricity and hot water
Standard rated (5%)
- Construction works to an existing building, unless it relates to a new extension of an existing building
- Demolition of existing buildings
- Architects’ and interior design fees
- Restoration works
- Fixtures and equipment not permanently affixed to the building and which can be removed without damage (e.g.,, furniture, decorative lighting, artwork, etc.)
- Any goods or services supplied after the building has been completed
Exempt
- Sale and rental of real estate (residential, commercial and bare land)
Standard rated (5%)
- Hotel accommodation
- Rental of function room and halls
- Car parking
- Management services, utilities, telecommunications, internet and television charged for separately and in addition to the rent
- The lease of serviced office space where the customer does not have the right to use a designated space on an exclusive basis
- Brokerage or property agent fees in relation to the sale or rental of real estate
Zero-rated (0%)
- Local transport of goods and passengers in Bahrain such as buses and taxis
- Airplane tickets from one place in Bahrain to a place outside of Bahrain
Standard rated (5%)
- Vehicle purchases
- Vehicle rental without a driver
- Transportation services for food delivery services
- Transportation services for sightseeing or leisure purposes
Telecommunication Services
Standard rated (5%)
- Fixed phone services (i.e. landlines)
- Home internet / Wifi services
- Mobile phone services used in Bahrain, e.g., calls, texts and data
Zero-rated (0%)
- Export of services
- Import of basic food items*
- Import of medicines and medical equipment**
*Food items listed in the GCC list of basic food items
**If approved by the National Health Regulatory Authority
Standard rated (5%)
- Services provided in Bahrain by a foreign company
Exempt items
- Import of equipment used by persons with special needs
- Import of personal baggage and used household items
- Import of gifts carried by passengers
