In brief
On 1 February 2017, the Kingdom of Bahrain signed the GCC unified VAT and Excise Treaties. The Minister of Finance stated that Bahrain is planning to introduce VAT by mid-2018 and is targeting to introduce Excise Tax by mid-2017. The normal constitutional processes will need to be completed prior to the introduction of the taxes.
In detail
The GCC Unified Treaties for VAT and Excise Tax (the Treaties) are the framework through which GCC Member States will implement their own VAT and Excise Tax national legislation and executive regulations.
Signing the Unified Treaties is one of the final steps required before the application of the taxes in Bahrain. The signature of the Unified Treaties suggests that VAT will be introduced in Bahrain by mid-2018, imposed at an expected rate of 5% for most goods and services, with certain exceptions.
The Excise Tax is planned to be introduced by mid-2017 in Bahrain, with tobacco products subject to excise tax at 100%, soft drinks at 50% and energy drinks at 100%. Other goods may become subject to the tax.
