Global Daily Tax News, Bahrain Guides On 2025 Real Estate VAT Change, (Sep 19, 2024)

Bahrain's National Bureau for Revenue has recently released an updated English-language guide on the value-added tax rules for real estate, to reflect changes incoming from January 1, 2025.

The update to the guidance explains that, from January 1, 2025, the provision of space for rental for retail or promotional stands will no longer be regarded as a supply exempt from value-added tax.

From the new year, such supplies will be liable to value-added tax at the 10 percent rate if the taxpayer providing the space is a taxable person.

The guidance adds: "The provision of a designated space within a shopping mall, retail, or entertainment area that is equivalent to and serves the same purpose as a standard shop within those premises shall not be considered a provision of space for retail or promotional stands for the purposes of applying VAT. Consequently, such supply will be regarded as an exempt supply of real estate for VAT purposes, provided that all the applicable conditions are met [...]." These conditions are set out in section 2 of the guidance publication.