Starting today, an increased 10% Value Added Tax is valid on all goods that are taxable by law as the Kingdom ringed in the year 2022 with renewed hope amid concerns over the new Omicron variant.
The increase comes two years after Bahrain started implementing a 5% VAT on taxable goods in a bid to curb budget deficit and re-stabilise the Fiscal Balance Programme impacted by Covid 19.
Supplies that are subject to the zero-rate (e.g. basic food, construction of new buildings, oil and gas, healthcare, and education) or exempt from VAT (e.g real estate and certain financial services) will be unaffected.
However, a 5% VAT rate will apply to standard-rated goods or services supplied before the 1st of January 2022. This is valid even if the invoice is issued or payment is made on or after the 1st of January 2022.