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Research by Country/Region January 21, 2018  
BAHRAIN: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports


A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
NO
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
Required documents are as follows:
1. A commercial invoice in Arabic or English (in duplicate)
2. A certificate of origin in Arabic or English produced by a Chamber of Commerce and endorsed by an Arab Embassy
3. A copy of the insurance policy, if applicable
4. A bill of lading, including gross weight and dimensions (four copies)
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Customs duties are applied to hardware and software based on the total CIF invoice value. The customs duty on the import of new software is 5% of the invoice value.

Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
Bahrain levies no taxes.

Is customized software treated differently than packaged software?
For customized software, all costs incurred outside Bahrain for all work performed in the creation of the programs (i.e., the material cost of the medium, the related hardware, the manpower cost utilized in the preparation of the software), should be indicated in the invoice. Duty will then be applicable on the CIF value.
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IMPORTS OF SOFTWARE UPDATES

What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
The customs duty on the import of new software is 5% of the invoice value. If the original invoice includes the cost of future updates, then a copy of this invoice should be presented when all software updates are imported. Customs duty will be applicable when the original software is initially imported. Any subsequent updates of the software will be dutiable on the cost of the update only. These costs should be reflected separately on the invoice. Any updates of software not listed in the original invoice will be subject to import duties. Documentation of duty payments should be submitted to Customs by the consignee at the time of the software update import, along with the original invoice or contract.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

Are software licenses classified in Harmonized System 4907?
Software licenses are not classified in Harmonized System 4907.

Are import duties/taxes applied? If so, on what cost/price base are they levied?
Customs duties do not apply. Bahrain levies no VAT or withholding taxes.

Are withholding or other additional taxes applied on software licenses? If yes, how?
Bahrain levies no withholding taxes.

If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
According to the Ministry of Information, license agreements included in shrink-wrapped software are binding on the end-user. Jurisdiction is governed as stipulated in the license agreement.
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
At present, the Customs agency does not regulate the distribution of software through the Internet, customs duties are therefore not applicable.

Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
Software delivered to a licensed distributor is subject to customs duties on the invoice value.

What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
At present, Customs does not regulate or follow-up the distribution of software through the Internet. Thus, no documentation is required.

Must an electronically delivered software import be accompanied by a physical shipment of the same product?
At present, Customs does not regulate or follow-up the distribution of software through the Internet. Thus, this a physical shipment not required.
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS

Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
Services related to the sale of software are not taxed.

Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
U.S. IT solution providers are permitted to send personnel to provide services based on the terms of the contract.

Are special visa, work permits, and/or professional certification by an accredited body required?
Visiting personnel must comply with all immigration procedures. Entry visas for American citizens may be obtained upon arrival at the Bahrain International Airport. U.S. holders of regular passports can obtain a two-week visa at the airport for USD 13. Entry visas can also be obtained from the Bahraini Embassy in Washington, D.C. The Government of Bahrain developing a custom-made, user-friendly electronic visa website. This website, targeted for operation by the beginning of 2004, aims to speed the airport's visa processing method and also to attract tourists through this simplified and accessible method. An Israeli entry stamp in a passport is not a bar to obtaining a Bahraini visa or to entering Bahrain, but not all airline personnel are aware that the former prohibition no longer applies. Additional information can be obtained from the Immigration Directorate.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
Yes.

If so, what are the documentation requirements?
Required documents: Delivery Order, Supplier Invoice (in triplicate), Packing List (in duplicate), Certificate of Origin, Insurance Certificate, Bill of Lading, Bank Payment Voucher.

Is special labeling required?
The Country of Origin and manufacturer's name should be indicated on the product and invoice.

What value should be shown on the invoice?
The value of the refurbished item.

How are duties and taxes assessed?
A customs duty is assessed on the CIF value of the invoice.
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Same as for refurbished computer equipment. See section E.1. above.
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3. REPAIRED COMPUTER EQUIPMENT
Are duties and taxes assessed on the re-import of repaired computer equipment?
Customs duties are applied to the repair charges, value of new spare parts added, and manpower costs associated with the re-import of repaired computer equipment.

How should the commercial invoice appear?
These costs above should be indicated on the commercial invoice.
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RESPONSE INFORMATION

This response was prepared by the U.S. Department of State/Economic Section in Manama, Bahrain, in March and August 2003. For further clarification please contact:
Nouf A. Jamsheer
Commercial Assistant
U.S. Embassy Manama
Tel: +973-273-300 Ext. 1421
Fax: +973-256-717
jamsheern@state.gov

Or
Desiree Baron
Economic and Commercial Officer
U.S. Embassy Manama
barond@state.gov

Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.

Sources: Bahrain's Ministry of Customs and Ports, and Bahrain's Ministry of Information.

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