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

Pre-registration Input VAT uses different conditions: Goods must be acquired or imported within five years before the registration effective date and remain in possession on that date; Services must fall within the prior six months; both must support eligible Economic Activity. A Capital Asset must have positive net book value, maximum deduction is based on that value, and its adjustment period starts from first use.

Who should read this?

New registrants and inventory, fixed-asset and first-Return teams.

Why does it matter?

Not all start-up purchases are automatically deductible, and one time window does not fit every item. Classification as Goods, Services or Capital Asset changes the answer; the certificate effective date controls.

Goods: five years and still heldServices: six monthsAsset: positive net book value

Current text

A. A Taxable Person shall be entitled to deduct Input Tax incurred on Goods and Services supplied to him or imported by him prior to the date of registration for Tax purposes in accordance with the following conditions: 1. The Goods must have been supplied to him or imported within a period not exceeding five years prior to the effective date of registration of the Taxable Person for Tax purposes and shall still be in the possession of the Taxable Person on the effective date of his registration for Tax purposes. 2. The Services must have been supplied to him within a period not exceeding six months prior to the effective date of registration of the Taxable Person for Tax purposes. 3. They must have been supplied to him or imported within the course of his Economic Activity conferring the right to deduct Input Tax in accordance with the provisions of the Law and these Regulations. B. A Taxable Person shall be entitled to deduct Input Tax incurred on Capital Assets supplied to him or which he imported prior to the effective date of his registration for Tax purposes provided that the following conditions are met: 1. Such Capital Assets must have a positive net book value at the effective date of the Taxable Person’s registration for Tax purposes. 2. They must have been supplied to him or imported for the purposes of his Economic Activity conferring the right to deduct Input Tax in accordance with the provisions of the Law and these Regulations. C. The maximum deductible Input Tax permitted on a Capital Asset acquired or imported by the Taxable Person prior to the effective date of his registration for the Tax purposes shall be calculated on the basis of the net book value of the Capital Assets, determined in accordance with the accounting practice of the Taxable Person. D. For the purpose of computing the adjustment period applicable to Capital Assets acquired or imported by the Taxable Person before the effective date of his registration for the purposes of Tax, the first year of the adjustment period is deemed to start on the date of first use of the Capital Asset by the Taxable Person.

Review pre-registration purchases

  1. 1

    Use the certificate effective date.

  2. 2

    Classify each item as Goods, Services or Capital Asset.

  3. 3

    For Goods, test five years and possession at registration.

  4. 4

    For Services, test the preceding six months.

  5. 5

    For assets, evidence positive net book value and first use.

  6. 6

    Link each item to activity granting deduction.

  7. 7

    Prepare inventories, invoices and evidence required for the first Return.

Connected provisions

Direct legislative link

Law — Article (44)

Pre-registration Input VAT

The Law creates the right and general conditions; this Article details windows and net book value.

Open connected Article
Direct legislative link

Regulations — Article (62)

Basis and evidence

The next Article specifies the first Return, inventories, invoices and customs declarations.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (61)

Official guide

VAT General Guide — Version 1.15

Input VAT deduction and adjustment

Connected Madar tools

Connected Madar tools

VAT Registration Centre

Check registration thresholds using your inputs, with mandatory, voluntary and uncertain cases distinguished.

Connected Madar tools

VAT Return Centre

Check return deadlines, calculate net VAT from entered amounts, and identify a correction route.

Illustrative example by Madar

Three purchases before registration

For registration effective 1 October: Goods bought two years earlier and still in stock may be tested; a consulting Service received seven months earlier falls outside the six-month window; and a machine with positive net book value is tested as a Capital Asset with deduction capped by that value.

Questions to help you apply it

  • What is the effective date?
  • Is the item Goods, Services or an asset?
  • Are Goods still held?
  • Is the Service within six months?
  • What is the asset's net book value?