The updated guide sets out what importers, producers and warehouse operators must do to register, file returns, claim refunds and stay compliant with Bahrain’s excise rules.
Bahrain’s National Bureau for Revenue (NBR) has published Version 1.2 of the Kingdom of Bahrain Excise Guide on 6 October 2026, outlining how excise tax operates in the country, from registration of goods to refunds and anti-evasion controls.
Legal framework and purpose
Bahrain introduced excise duty on 30 December 2017 to encourage healthier lifestyle choices by reducing the consumption of harmful products.
The tax is codified under Law No. (39) of 2017, which ratifies the GCC Common Excise Agreement, and Law No. (40) of 2017 (Excise Law). It also rests on Ministerial Order No. (17) of 2017 (Executive Regulations) and the Unified GCC Customs Regulations.
Taxable goods and rates
Excise tax applies to three main product categories:
- Tobacco and its derivatives, including cigarettes, waterpipe tobacco, pipe tobacco and e-tobacco: 100%
- Energy drinks: 100%
- Carbonated drinks: 50%
All excisable items must be registered on the official NBR Excise Goods List before local production or importation.
Calculation and tax trigger
Excise due is calculated by multiplying the excise rate by the retail selling price, excluding VAT and excise.
For locally produced goods, the retail price listed on the NBR website is used. For imported goods, the higher of the NBR list price or the retail price declared on Customs declarations applies.
Excise is a one-off tax triggered when goods are released for consumption, such as on import clearance or on release from a local production or warehouse facility into retail. Unlike VAT, it does not cascade across the supply chain, and end-consumers do not see an excise line item on invoices.
Tax suspension and excise warehouses
Excise liability is suspended while goods are produced, stored or transferred between designated Excise Warehouses or Customs Warehouses.
Licences are valid for 12 months and must be renewed within 90 days before expiry. Applicants must submit a mandatory bank financial guarantee covering the total potential tax liability on stored inventory.
A licence is cancelled automatically if it is not renewed, if it goes unused for more than 90 days, or if the company’s Commercial Registration expires. On cancellation, all residual stock becomes immediately subject to excise tax.
Compliance, filings and refunds
Commercial importers and producers must register with the NBR before starting activities. Importers pay tax at Customs clearance, while local producers must file returns and pay through the NBR portal within 15 days from the end of each filing period.
Passengers importing excisable goods for personal use are exempt if the quantity is under the GCC threshold, for example, up to 400 cigarettes. Quantities above the threshold are taxed at entry.
Refund or deduction claims are allowed in specific scenarios:
- Re-exporting goods outside the GCC, with a minimum shipment value of BHD 2,000
- Exporting to another GCC country
- Using excisable raw materials in further excisable production
- Excess payments
- Supervised destruction of damaged goods
Digital stamps scheme
The guide also describes a tracking and supervisory scheme that uses physical digital stamps with embedded security codes to prevent illicit trade and tax evasion.
Stamps are mandatory on cigarettes, waterpipe tobacco (“molasses”), heated tobacco products, jirak, and pipe and dokha tobacco.
Registered importers and manufacturers order the stamps through the NBR and affix them at the production plant before shipment. The goods must then pass Customs verification before entering Bahrain.
The guide gives producers, importers and warehouse operators a single reference for meeting their excise obligations in the kingdom.
