TaxSavvyBH

Excise and VAT on the same product

Do I pay VAT on top of excise on energy drinks?

The situation

Excise and VAT are separate taxes administered by the NBR.

The law

  • Decree-Law No. 40 of 2017 on Selective Tax (Excise): Excise on tobacco products and energy drinks at 100% and on carbonated and sweetened drinks at 50%, administered by the NBR
  • Decree-Law No. 48 of 2018 on Value Added Tax: Bahrain VAT law administered by the NBR; covers registration, invoicing, returns and penalties

What it means for you

VAT at 10% is generally charged on the price including excise. Example: price BHD 1 plus BHD 1 excise gives BHD 2, then VAT BHD 0.2. Check NBR guidance for the exact base.

What to do

  1. Compute excise.
  2. Add to the price.
  3. Apply VAT.
  4. Report both.

Confirm the VAT base treatment in current NBR guidance.

We can do this for youExcise (selective tax) registration and returns for importers and producers: BHD 250

Related