Tax rate by region Bahrain

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Bahrain operates a standard 10% Value Added Tax (VAT) framework. While resident businesses are subject to specific revenue thresholds for voluntary or mandatory registration, non-resident suppliers of digital products must register from their very first taxable transaction with a local consumer.

Bahrain

Bahrain implemented Value Added Tax on 1 January 2019 as part of the GCC Common VAT Agreement. The standard rate is 10%. The National Bureau for Revenue (NBR) administers VAT, handling registrations, collections, and compliance.

Official government link: National Bureau for Revenue

10.00%

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No specific reduced rate for digital goods and services

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

From your first B2C sale

Online registration possible

Yes

Local representative needed

Required for non-resident businesses without fixed establishment registering for VAT

Registration procedure

Apply via NBR portal; submit business registration documents and tax identification information

List of digital and electronic services liable for tax

SaaS, software & digital products

Penalties

Failure to register within 60 days: up to BHD 10,000.

Late filing or late payment (within 60 days): 5-25% of declared/paid tax.

False import or supply information: 2,5-5% of unpaid tax per month.

Late payments also accrue interest.

Registration threshold

First sale (non-resident)
BHD 37.500 (resident mandatory);
BHD 18.750 (resident voluntary);

Filing interval

Quarterly or monthly depending on turnover

Filing deadline

The last day of the month

E-invoicing requirements

Not yet mandatory

Record keeping

5 years

How-To Guides: Bahrain SaaS VAT

Step: 1 Determine if you need to register.

Effective January 1, 2019, Bahrain requires non-resident vendors of digital services to consumers (B2C) in Bahrain to register for and collect VAT, regardless of the sales amount.

Step: 2 Business Registration

Registration is managed via the National Bureau for Revenue (NBR) portal. Non-residents can register directly or via a local tax representative.

Step: 3 TIN/VAT Number

A 15-digit VAT Registration Number is issued by the NBR upon successful registration.

Step: 1 Standard VAT Rate

The standard rate in Bahrain is 10% (increased from 5% in 2022).

Step: 2 VAT Formula

To calculate your tax amounts, use the following formula:

Tax Value = Net Price X 10.00%

Step: 3 Reverse Charge (B2B)

Applies. When selling to a VAT-registered business in Bahrain, the supplier does not charge VAT; the buyer accounts for it on their own return.

Step: 1 Selling B2C

You must charge 10% VAT on all SaaS subscriptions sold to private individuals or non-VAT-registered entities in Bahrain.

Step: 2 Selling B2B

VAT is not charged if the buyer provides a valid Bahraini VAT ID. Apply the Reverse Charge Mechanism (RCM).

Step: 3 Invoice Requirements

Tax invoices must include:

Supplier name, address, and 15-digit VAT ID
Customer name and address
Sequential invoice number
Date of issue and date of supply
Description of SaaS service
Total amount in BHD (or exchange rate used)
VAT rate and amount charged per line item.

Step: 1 Filing Interval

Taxes should be filed:

monthly (if annual supplies > BHD 3M)
quarterly (if $\le$ BHD 3M).

Step: 2 Filing Deadline

Filing deadline is the last day of the month following the end of the tax period (e.g., Q1 return is due April 30th).

Step: 3 Submission

Electronic filing is done via the NBR e-Service Portal. Payments are made via Fawatri/Fawateer or wire transfer.

Step: 4 Record Keeping

Tax records should be kept minimum of 5 years (standard).

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Bahrain’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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