Bahrain's National Bureau for Revenue has issued Version 1.1 of its Excise Guide, introducing revised guidance on the deduction or refund of Excise paid while reaffirming the country's Excise framework, registration requirements and compliance procedures.
Bahrain’s National Bureau for Revenue (NBR) has published Excise Guide Version 1.1 on 29 June 2026, updating its guidance on the operation of the Kingdom’s Excise system. The revised guide is intended to help businesses understand Excise rules, compliance obligations and the tax treatment of activities involving excisable goods.
The principal update from Version 1.0 is a dedicated section on the deduction or refund of Excise paid. The guidance explains the circumstances in which taxpayers may recover Excise, subject to the applicable conditions.
Deductions or refunds are available for Excise paid on excise goods released for consumption in Bahrain and later exported outside the Gulf Cooperation Council (GCC) territory. Relief also applies where goods are subsequently re-exported outside the GCC, provided the value of the excise goods is at least USD 5,000 or its equivalent in Bahraini dinars.
The guide also confirms that deductions or refunds may be claimed for Excise paid on goods exported to another GCC country, excise goods used in the production of other excisable goods, excess Excise payments, and non-consumable excise goods destroyed under the supervision of Customs Affairs. Taxpayers seeking relief for destroyed goods must notify the NBR before the destruction process and comply with all specified conditions.
Excise rates and calculation
The guide reiterates that Bahrain’s Excise regime, introduced on 30 December 2017, applies at a rate of 100% to tobacco and its derivatives and energy drinks, and 50% to carbonated drinks.
Excise is calculated by applying the relevant rate to the Retail Selling Price (RSP) of the goods, excluding VAT and the Excise tax itself. For locally produced goods, the RSP is based on the official Excise goods list maintained by the NBR. For imported goods, the taxable price is the higher of the NBR-listed price or the value declared at Customs.
Release for consumption and suspension arrangements
The guide explains that Excise is a one-time tax triggered when goods are released for consumption. This includes locally produced goods leaving a production facility or Excise warehouse, imported goods being released from Customs jurisdiction, or excise goods being found outside an approved suspension arrangement without the tax having been paid.
It also outlines the operation of Excise warehouses and suspension arrangements, under which licensed facilities may produce, store or transfer excisable goods without immediate payment of Excise. Warehouse licences remain valid for 12 months, require a financial guarantee from a bank covering potential tax liabilities, and renewal applications must be submitted within 90 days before expiry.
Registration and payment obligations
Businesses importing or producing excise goods for commercial purposes, or holding goods under suspension, are required to register for Excise.
For imported goods, Excise is generally paid to Customs when the goods are released from Customs jurisdiction. For locally produced goods, registered persons must file an Excise return through the NBR portal and pay the tax due within 15 days after the end of the Excise period. The guide also notes that passengers carrying excisable goods for personal use are exempt unless prescribed quantity thresholds are exceeded.
Digital stamps scheme
The updated guide also highlights Bahrain’s Digital Stamps Scheme, which is designed to combat illicit trade and tax evasion involving tobacco products.
Digital stamps are required for products including cigarettes and waterpipe tobacco, enabling authorities to track products throughout the supply chain. Customs will not release covered tobacco products unless they bear a valid, activated digital stamp.
