English text status

English translation published by the NBR in its bilingual Regulations file (marked unofficial). The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.

Practical summary

Deemed-Supply Goods use purchase price, otherwise actual cost at Supply; Services use actual cost. If price or cost cannot be established, fair Market Value applies. Goods remaining on cessation or deregistration use fair Market Value at deregistration.

Who should read this?

Gifts, private use, assets, deregistration and costing teams.

Why does it matter?

No Consideration does not mean zero value. Deregistration stock also needs a date-specific fair-value snapshot.

Goods purchase priceActual costFair Market Value fallbackDeregistration stock

Current text

A. For a Deemed Supply of Goods, the purchase price shall be the basis for imposing the Tax. If the purchase price is not known, the total actual cost as at the date of the Supply shall be used. B. For a Deemed Supply of Services, the total actual cost incurred by the Taxable Person shall be used as the basis for imposing Tax on the provision of such Services. C. Where the purchase price or the total actual cost as stipulated in Paragraphs A and B of this Article cannot be determined, Tax will be imposed on the basis of the fair Market Value of the Goods or Services. D. The value of a Deemed Supply where the Economic Activity ceases shall be the fair Market Value of the Goods held by the Taxable Person at the date of his deregistration.

Value a Deemed Supply

  1. 1

    Confirm a Deemed Supply exists.

  2. 2

    Start with Goods purchase price.

  3. 3

    Otherwise determine actual cost.

  4. 4

    Use Service actual cost.

  5. 5

    Document fair value fallback.

  6. 6

    Inventory and value Goods on deregistration date.

Connected provisions

Direct legislative link

Regulations — Article (9)

Deemed-Supply exceptions

First decide whether a Deemed Supply exists.

Open connected Article
Direct legislative link

Law — Article (10)

Deemed Supply

Article 28 values the statutory cases.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (28)

Connected Madar tools

Connected Madar tools

Audit and Assessment Centre

Identify the audit or assessment-review stage and prepare an action list and report from your answers.

Illustrative example by Madar

Free Good with BHD 400 purchase price

A Good treated as a Deemed Supply was bought for BHD 400, so valuation starts at BHD 400. If purchase price and actual cost cannot be established, fair Market Value applies. Remaining Goods on deregistration use their fair value on that date.

Questions to help you apply it

  • Deemed Supply?
  • Purchase price?
  • Actual cost?
  • Fair value needed?
  • Deregistration inventory?