TDT | Manama The Daily Tribune – www.newsofbahrain.com At the stroke of midnight this Friday, as people worldwide ring in the New Year, it will also mark the start of Bahrain's effort to re-stabilise the Fiscal Balance Programme impacted by COVID-19. On that day, as approve
TDT | Manama
The Daily Tribune – www.newsofbahrain.com
At the stroke of midnight this Friday, as people worldwide ring in the New Year, it will also mark the start of Bahrain’s effort to re-stabilise the Fiscal Balance Programme impacted by COVID-19. On that day, as approved by the Council of ministers in September, the Value Added Tax in Bahrain on supplies and imports will jump to 10% from the current 5%.
The Council of ministers had said that the increased rate will be effective, starting the 1st of January 2022. Tribune learns that the supplies currently exempt or zero-rated would maintain the status quo. The new VAT rate is as per a newly inserted Article 4 in the VAT Law (33) of 2021.
5% for deal signed earlier
The article further states a supplier can continue with 5% VAT for a contract signed on or before the 31st of December 2021 and becomes effective after the date of enforcement of the new VAT law.
Meaning, one could continue with 5% VAT until the end date of the contract, or contract renewal or amendment date, or a year from the 1st of January 2022. However, if the contract period exceeds 2022, the VAT rate will change to 10% on the supplies spanning after 2022.
His Majesty King Hamad bin Isa Al Khalifa ratified the law for VAT rate change from 5% to 10% on the 18th of this month. The law entered the official gazette on the 23rd of December 2021.
As per Article 3 of the VAT Law (33) of 2021: “Tax shall be imposed at a standard rate of (10%) on the value of a Supply or import unless a provision is made in the Law to exempt from Tax or to impose Tax at a zero rate.”
Bahrain’s Parliament on the 7th of December 2021 debated the VAT legislation during their weekly session and voted the law behind closed doors.
