CBB confirms VAT exemption for financial, banking services

Manama, Dec. 25 (BNA): In implementation of the directives of His Majesty the King to take into consideration the needs of the Bahraini citizens through exemptions of basic goods and services from the application of the Value Added Tax (VAT), the Central Bank of Bahrain (CBB) confirmed that Article 54 of the Value-Added Tax Law (VAT Law) stipulates that the provision of financial services specified by the Regulation shall be exempt from the application of VAT. This exemption shall not apply in respect of specific fees, commissions or commercial discounts. Therefore, banking transactions will not be subject to VAT either on loan interests, deposits or withdrawals from accounts either cash or cheques, including withdrawal and deposit through ATMs, as well as transferring or receiving of any transactions with cash or any financial bond or banknotes or any payment orders in addition to the exemption of Islamic financial products provided in accordance with approved contracts, according to the CBB statement issued today.