Bahrain – VAT and Transport services
Similar to the UAE and KSA, in Bahrain a zero rate is applicable on the international transport services of goods which begin in, end or pass through its territory, including services and the supply of related means of transport. The zero rate is also applicable on the supply of services and goods directly or indirectly associated with the international transport of passengers and goods, including goods and services supplied for use or consumption on board a means of transport.
A zero rate is also applicable on the local transport services of goods and passengers by land, water or air. Exceptions apply, i.e. the standard VAT rate is applicable in the following five cases: (i) Transport services provided by a person who does not meet any regulatory or licensing requirements from the authorised body to provide such services, (ii) Services of vehicle rental without a driver, (iii) Transport services for sightseeing or leisure purposes, (iv) Food delivery services provided by a person supplying food, (v) A transport service which is ancillary to the principal supply of goods or services which is taxable at the standard rate, and is not priced separately to the supply of a good.
Authors: Thomas Vanhee (Aurifer Middle East) and Roberto Scalia (Chairman JIACC Tax Commission)
