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Bahrain VAT Increase to 10% - Transitional Rules Guideline

Value Added Tax was introduced in the Kingdom of Bahrain in 2019 at a standard rate of 5% on all supplies and imports, with the exception of supplies that are subject to VAT at the zero-rate or exempt from VAT. With effect from 1 January 2022, the standard rate of VAT will be changed to 10%.

This Guide is an explanation of the transitional rules that apply during the transitional period between the 5% VAT rate and the VAT rate of 10%. It provides guidance on how and when to apply the new standard rate of VAT to ensure that the VAT provisions are properly applied.

For the purposes of applying the transitional provisions, the two following dates should be taken into consideration:

1. Law Enforcement Date: the enforcement date mentioned in the Amended VAT Law published in the Official Gazette, which is 24 December 2021.

2. Effective Date of the VAT rate change: the date on which the new VAT rate will be effective, which is 1