GCC Indirect Tax Weekly Digest

Bahrain developments

NBR publishes real estate VAT guide

The Bahrain National Bureau for Revenue (NBR) has published the first edition of its real estate VAT guide.

The guide provides an overview of the VAT treatment of the sale and lease of various types of real estate, including commercial and residential real estate, serviced accommodation, labour accommodation, and real estate related services.

An overview of the VAT treatment of the construction of new buildings, and related services, is also included in the guide.

Notably, the sale or lease of commercial real estate is exempt from VAT in Bahrain, unlike in the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA), where it is standard rated.

The VAT treatment of real estate transactions can be complex, especially when services are supplied in addition to the primary supply. For example, providers of serviced or labour accommodation must consider if composite supply rules apply.

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.