INTRODUCTION TO VALUE ADDED TAX

Value Added Tax (or VAT) is an indirect tax and also a type of general consumption tax. In a country which has a VAT, it is imposed on most supplies of goods and services that are bought and sold. Bahrain published its Value Added Tax decree law paving the way for the introduction of the indirect tax on 1 January 2019. VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.