Conditions for export of service under VAT
Export of services will attract a zero rate of VAT provided all of the following conditions are met:
- The customer receiving the service does not have a place of residence in Bahrain.
- The customer must not be present in Bahrain at the date the services are performed.
- The services do not relate to tangible goods or real estate located in Bahrain at the time the services are performed.
- The services are enjoyed outside the territory of the Implementing States.
VAT on the import of goods
Import VAT, where applicable, will be charged on the value of the imported Goods. The value of imported Goods will be the Cost, Insurance, and Freight (CIF) value plus excise tax, customs duty, and any other charges, excluding Tax.
Exceptions to VAT on the import of goods
All Goods imported into Bahrain will be subject to VAT, unless they are specifically exempt from VAT.
The following transactions are exempt from Tax:
- Import of Goods, if the Supply of such Goods in the state of final destination is exempt from or subject to Tax at zero rate.
- The following imports of Goods, that are also exempt from customs duty Goods:
- Goods imported for diplomatic purposes.
- Goods imported for military purposes.
- Imports of personal luggage and household appliances used by citizens residing abroad and foreigners coming to reside in Bahrain for the first time.
- Imports of returned Goods.
- Personal luggage and gifts accompanied by travelers.
- Goods for people with special needs.
VAT on exported goods received in Bahrain for repair and maintenance
VAT is at the zero rate on the re-export of Goods which are temporarily imported into Bahrain for repair, conversion, restoration and processing under the conditions stipulated in the Customs Law.
Payment procedure of VAT on import
The importer shall pay the tax at the first point of entry to the Customs Affairs in Bahrain. However, a Taxable Person may apply to the NBT to defer payment of tax at import until the next Tax Return.
VAT on Import/ export transactions within GCC nations
The NBR will announce when it considers any GCC Member State as an Implementing State for tax purposes. Until an announcement has been made by the NBR, a GCC Member State shall be treated as a State outside of the GCC for VAT purposes.
As no announcement has yet been made by the NBR in relation to this, all GCC countries will be considered as outside of the GCC for VAT purposes. Therefore, the normal VAT rules would apply for supplies made to or received from persons outside of Bahrain.
If you import goods into Bahrain, VAT will be payable at the time of import unless the import is specifically exempt from VAT.
VAT on Goods billed from Bahrain but provided from a supplier situated outside Bahrain to a receiver outside Bahrain
In this case, there is no physical movement of goods to or from Bahrain as the goods are supplied and shipped directly from outside of Bahrain to another place outside of Bahrain. Therefore, such transactions will be outside the scope of Bahrain VAT.
VAT on the import of goods exported for repair and maintenance
Where goods are re-imported into Bahrain after having been temporarily exported outside of the territory of the Implementing States for repair, completion of manufacturing or any other similar services, the value of the goods at re-import will be the value added to the goods while they were temporarily exported, in accordance with the provisions of the Customs Law. Import VAT will, therefore, be payable on this value.
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