Import VAT
All goods imported into Bahrain are subject to 10% VAT at the point of entry, calculated on the customs value plus any applicable duties. VAT-registered businesses can recover this as input tax on their next VAT return.
📦 Standard Imports
10% VAT on CIF value + customs duty. Paid at customs clearance. Recoverable on next VAT return if imported for business purposes.
🔄 Reverse Charge
Services imported from non-GCC suppliers — buyer self-accounts for VAT. No cash payment to customs; declared on VAT return.
🏭 Free Zone Imports
Goods entering designated free zones may be suspended from customs duty. VAT applies when goods move from free zone to mainland.
🤝 GCC Imports
Goods from GCC states with customs duty already paid enter duty-free. VAT still applies via reverse charge mechanism.
Export VAT (Zero-Rate)
Exports of goods and certain services to non-GCC destinations are zero-rated — meaning 0% VAT applies but full input VAT recovery is available. This makes Bahrain export-friendly.
📋 Documentation Required for Zero-Rating
- Customs export declaration (Single Administrative Document)
- Bill of lading or airway bill
- Commercial invoice addressed to non-Bahrain customer
- Evidence goods have left Bahrain within 90 days
Common Pitfalls
- Failing to apply reverse charge on imported services
- Claiming zero-rate without proper export evidence
- Double taxation on GCC imports due to missed duty credits
- Incorrect customs valuation inflating import VAT
- Late recovery of import VAT exceeding the 5-year window