The Kingdom of Bahrain under Decree-Law Number 48 of 2018
(Decree-Law) is the pivotal legislation with regards to Value Added
Tax (VAT) in Bahrain. Further, the Executive Regulations Number 12
of 2018 (Executive Regulations) are the elaborate rules with
respect to the application of the VAT Law. With regards to the
related party transactions, Article 22 of the Decree-Law as well as
Article 24 of the Executive Regulations, lays down the rule that on
the supply between two or more related parties a market value
should impose in case the value of the supply is represented or
marked lower than the actual market value, and there cannot be full
claim on related input tax by the recipient.
