Bahrain Updates VAT Guidance on
Import Deposits and Recovery

Bahrain’s National Bureau for Revenue (NBR) has released Version 1.5 of its VAT guidance, dated March 11, 2026. The updated manual introduces specific rules regarding the recovery of VAT paid as deposits during the import of goods.

VAT Deposits vs. Recoverable TaxThe NBR clarifies that VAT amounts deposited under customs declarations (such as temporary imports or pending documentation) are treated strictly as deposits against potential future liabilities. These deposits are not immediately recoverable as input VAT because they have not been finally settled.

Requirements for RecoveryTo claim back input VAT on these transactions, registered persons must adhere to the following:

• Status Change: The deposit must be officially transferred to a “VAT confiscation” state by Customs Affairs.
• Documentation: The taxpayer must obtain a customs declaration receipt or equivalent documentation confirming this state change.
• Timeline: Once the “confiscation” status is confirmed, the VAT can be recovered through the respective VAT return or within five years from the end of the calendar year in which it became recoverable