A 5% VAT will be implemented in Bahrain at the start of the New Year and here’s what you should know...
9 October 2018| Last updated on 9 October 2018
Bahrain’s parliament approved the introduction of VAT in the country at the start of 2019.
Short for Value Added Tax, residents in Bahrain will now be subjected to a 5% vat on various goods and services in the country.
The decision by the parliament in Bahrain was made on Sunday and is said to come into effect on January 1, 2019.
This newly added VAT into the country is aimed to support businesses in Bahrain and make companies ready to implement this.
Also, the VAT aims to change Bahrain’s economic system and avoid any public finance issues – like the drop in oil prices, which caused the Bahraini dinar to drop in value.
Businesses and companies have been advised to start preparing and analyzing the implications of the new tax law, because the lack of preparations can have severe penalties and disruption in business.
Bahrain based business have less than four months to start prepping for tax strategies on operations, commercial and pricing.
Lessons to learn from the neighbours
Bahrain’s neighbour, the United Arab Emirates, has introduced the VAT at the start of 2018 and has already witnessed positive sentiments towards it.
Therefore, Bahrain will be leaning key lessons from the VAT introduction in the UAE and Saudi Arabia – by covering VAT fundamentals, key-aspects and preparing for the new economic introduction.
Bahrain will become the third country in the Gulf Cooperation Council, or GCC, to implement the Value Added Tax of 5% on goods and services to residents in the country.