Excise Tax in Bahrain

Excise Tax is an indirect tax levied by the Bahrain government on goods that are considered harmful to human health or the environment. The basic reason for implementing Excise Tax is to reduce the consumption of these goods, raising income for the government that can be spent for the public.

In November 2016 the GCC countries had agreed to implement an excise tax on harmful goods, in order to reduce the consumption of these goods. Accordingly, the Kingdom of Bahrain had implemented Law No. (40) of 2017 On Excise Tax to control the consumption of excise goods.

Why Excise Tax in Bahrain?

The excise tax is imposed on harmful goods with an aim of reducing the consumption of harmful goods in the Kingdom of Bahrain. This would result in the consumption of healthier alternatives away from harmful products.

Which are the excise goods in the Kingdom of Bahrain?

The following are the types of Excise goods in Bahrain along with their excise rate:

You may visit the link for a more detailed list of the excise goods under the above 3 categories.

Which companies are liable to register for excise tax in the Kingdom of Bahrain?

The companies that undertake any of the following activities in the Kingdom of Bahrain are required to register for excise in Bahrain:

1. Companies that manufacture excise goods.
2. Companies who are involved in the import of excise goods.
3. Companies involved in the storage of excise goods.

Kindly note that no producer or importer of the excise goods will be able to conduct an economic activity unless they are registered for Excise in the Kingdom of Bahrain.

How to register for Excise in Bahrain?

To register for excise in Bahrain the eligible companies must first fill in the excise tax form available on the official webpage of the National Bureau for Revenue and submit the application. Supporting documents are also relevant for the completion of the registration process.

After the completion of the registration process, the companies will be issued a Unique Identification number known as the TIN.

Steps to follow excise tax registration :

1. The registration application form should be downloaded from the website of the National Bureau for Revenue and filled in.
2. Send the filled form along with the required supporting documents to the email excise@nbr.gov.bh.
3. The TIN will be issued if the request is approved. The NBR will notify the applicant if the request is approved or rejected.
4. The NBR will consider the request within 30 days from submission. If there is no response within 30 days, then the request is deemed to have been rejected.

The companies registered for excise are obliged to collect excise duty on excise goods at the applicable rate.

 What is licensing of warehousing?

The companies that store or produce or transfers excise goods are required to apply for an excise warehouse license.

After the registration for Excise, the companies should submit their Warehouse licensing request. This can be done by filling the designated form available on the official webpage of the National Bureau for Revenue.

The following are the steps to obtain a warehouse license:

1. Download the form from the website of the National Bureau for Revenue and fill in the required data.
2. Send the completed form along with the supporting documents to the email excise@nbr.gov.bh.
3. The NBR will generate an Excise Warehouse no. once the application is approved. The NBR will notify the applicant if the request is approved or rejected.
4. The NBR will consider the request within 30 days from submission. If there is no response within 30 days, then the request is deemed to have been rejected.

When to submit the Excise return and make payment?

The excise tax period in Bahrain shall be 2 months. The companies are hence required to file their excise tax return after the completion of 2 months (60 days).

The companies are required to submit the excise tax return and make payment within 15 days from the date of completion of the excise tax period of 2 months.

How to submit the excise return?

The excise return should be submitted after the completion of each excise period by sending the excise return to the following email excise@nbr.gov.bh. The excise return form is available at the official webpage of the National bureau for Revenue.

The following are the steps to submit the excise return:

1. The excise return form is to be downloaded from the webpage of the National Bureau for revenue and filled in.
2. Send the completed return along with supporting documents (Invoices for all the excise goods released into the Market) to the email excise@nbr.gov.bh.
3. Complete the payment of the liability within 15 days from the end of the excise period.

How to make payment of the liability?

The payment mechanism includes attaching the excise return and making payment of the excise liability through any of the following methods:

1. Direct transfer to the IBAN number: BH97 NBOB 0000 0088 5116 85.
2. Payment through cheques in the beneficiary Account name: M/S. Excise Tax Revenues.

Our Tax Experts in Emirates Chartered Accountants Group Bahrain believe in a proactive approach to tax advisory services with a cost-effective and tailor-made option that is preferred by businesses all over. Our team of professionals is well versed with the Tax Law’s in Bahrain.