Finally, Decree-48 of Bahrain VAT Law has been approved by Bahrain parliament.  And now industrial, businesses & professional are waiting for Executive Regulation very patiently.

After released  VAT Decree Law, now businesses needs to understand their VAT impact on their business.  They need to analyses & understand the VAT requirement changes in business.

Education sector is a very important sector for any country. If we talk’s about Bahrain, its literacy rate is very high in GCC countries and other world countries.

By following GCC Common framework, it has been decided that supply of education services shall be zero rated as mentioned in decree law.

As mentioned in Article 53(12) that The Supply of educational Services and related Goods and Services including kindergarten, pre basic education, basic, secondary and higher education.” 

It means that supply of education services and related goods and services for nurseries, kindergarten, pre basic education, basic, secondary and higher education shall be zero rated.

What is meaning of education services and related goods and services?

It means that books, school dresses, school fees, transport-use for school children’s, school building, sports goods and services for education purpose in schools, tuition fee or any other education related activities which are related to education.

What does zero rated supply means?

It means that you cannot charge VAT on supplies delivered by you, but you can still claim VAT paid tax on supplies received by you, at the time of filing VAT return.

Do we need to calculate threshold limit before registration deadline?

Yes, you should need to calculate your threshold limit before registration deadline and if it crossed then apply for VAT registration as per decree law.

What if we will not get registered before given deadline? 

There is specific provision in VAT decree law regarding non compliances penalties. You will have to pay huge amount penalties to government. It can be a big loss for your institutions.

You should prepare for regularly compliances of VAT & Accounts. You should made changes in your ERP Software accordingly. You should ready your very first invoice before 1st January-2019. 

Though, VAT Executive Regulation is yet to be released, more clarification shall come out after release of Executive Regulation. But in initial stage now education institution should start to preparation for VAT.

The above view are personally and only for the education purpose.  For any mistake and improvement, your valuable suggestions are most welcome.


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March 2021