The National Bureau for Revenue (NBR) has clarified eligibility and evidence requirements for applying the VAT profit margin scheme to used goods. The updated guidance has excluded goods that were not previously subject to VAT from the scheme.
The National Bureau for Revenue (NBR) has clarified the conditions for applying the VAT profit margin scheme to used goods in version 1.3 of its VAT retail and wholesale guide, published on 20 September 2026.
Under the optional scheme, VAT is calculated on a supplier’s profit margin rather than the full value of the supply. Its application requires prior approval from the NBR.
The updated guide states that the scheme is available only for goods that were previously subject to VAT. Used goods acquired before VAT Law took effect, as well as goods that were not previously subject to VAT for any other reason, are excluded and remain subject to VAT on their full selling price.
Suppliers must retain evidence showing that the goods were previously subject to VAT. This may include details of when the goods were first manufactured, sold or brought into use, or a purchase invoice or customs declaration confirming that VAT was charged in Bahrain.
For vehicles, evidence that a vehicle was first registered after 1 January 2019 may be used to demonstrate that it was brought into use after VAT was introduced.
The NBR is responsible for administering, auditing and enforcing VAT in the Kingdom of Bahrain. VAT was introduced at 5% on 1 January 2019 and increased to 10% from 1 January 2022.
