Tax advisory for consultancies, law firms, and professional service firms.
Services to non-resident clients outside Bahrain are zero-rated (0% VAT). Must prove client is outside Bahrain and services are not connected to Bahrain real estate or events.
Partnership profit shares are not subject to VAT (outside scope). However, specific services provided by partners to the firm may be taxable. Bahrain has no personal income tax on partner drawings.
Recharging costs to clients — disbursement vs reimbursement treatment. True disbursements (agent) are outside VAT scope. Recharges (principal) are standard-rated.
Legal advisory, litigation, and arbitration. Court fees disbursement treatment. International legal services zero-rating.
Statutory audit, advisory services, and bookkeeping. Group audit allocations and cross-border engagement letters.
Strategy, digital transformation, and HR consulting. Place of supply rules for remote consulting services.
Design services connected to Bahrain real estate are always Bahrain-sourced. Construction supervision and project management fees.
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