English translation published by the Legislation and Legal Opinion Commission. The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.
Capital Asset Input VAT is linked to net book value at registration and tracked from first use through a five-year adjustment period for movable or intangible assets, or ten years for immovable assets.
Taxable Persons, finance teams and advisers applying this Article to a Bahrain VAT position.
Capital assets require continuing records; a sale or use change during the adjustment period can affect input VAT.
Current text
Application steps
- 1
Establish capital-asset status and type.
- 2
Record first use and net book value at registration.
- 3
Track initial and annual deduction percentages.
- 4
Monitor disposals and changes until the adjustment period ends.
Connected provisions
Official guides and tools
Building used for two activities
A change in a building's taxable and exempt use is compared with its first-year deduction ratio, with the annual adjustment tracked through the ten-year period.
Questions to help you apply it
- When was the asset first used?
- What was the initial deduction?
- Did its use change during the adjustment period?