Blog: Bahrain Business Insurance VAT

Insurance VAT Treatment

Insurance Type	VAT Rate	Notes
Life Insurance	Exempt	Financial service exemption. No output VAT. Input VAT not recoverable.
Health Insurance	10%	Standard-rated. Employer cost. Input VAT recoverable if for staff.
Motor Insurance	10%	Standard-rated. Third-party and comprehensive. Input VAT blocked on personal vehicles.
Property Insurance	10%	Standard-rated. Input VAT recoverable if property used for taxable supplies.
Reinsurance	0%	Zero-rated if policyholder is outside Bahrain. Domestic reinsurance follows underlying policy.

💡 Input VAT Tip: Insurance companies are partially exempt businesses. They must use the partial exemption method to calculate recoverable input VAT — only input VAT attributable to taxable supplies (general insurance) is deductible.

Insurance VAT Guide

Insurance VAT Treatment

Insurance Tax Advisory