The Bahrain National Bureau for Revenue (NBR) has released the first edition of its Financial Services VAT guide (FSI VAT Guide) and Islamic finance products generally have the same VAT treatment as their conventional financial product counterpart.

NBR stated that a five per cent standard tax is applicable where the payment for the services is made by way of fees, commissions or commercial discount.

Additionally, tax exemption will be applied where the payment for the services is made by way of an implicit margin or spread, including interest.

The NBR also said zero-rated will be applicable recipients who resides outside Bahrain if all conditions for a zero-rated export of services are met.

Similarly, the FSI VAT guide classifies precious metals gold, silver and platinum as zero-rated if the supply is of investment or if the first supply of the precious metal after extraction is for trading purposes.

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