NBR issued an updated Imports and Exports VAT guide on 11 March 2026, including new guidance on how VAT paid as deposits on imported goods can be recovered.
Bahrain’s National Bureau for Revenue (NBR) released an updated Imports and Exports VAT guide on 11 March 2026. The revised guide adds a section addressing the treatment of VAT deposits related to recovering VAT paid on imported goods.
VAT paid in a form of a deposit
The VAT amount deposited pursuant to the customs declaration related to (import till completion of documents through insurance) or the Temporary Import customs declaration is merely a deposit against potential future VAT.
The VAT guaranteed by the deposit is not recoverable as import VAT, as it has not been finally settled, and shall only become recoverable, subject to the input VAT recovery rules, upon its confiscation by Customs Affairs. In order for a VAT registered person to claim back input VAT on the relevant customs declaration, he should obtain a customs declaration receipt or any other supporting documentation issued by Customs Affairs, which shows that the deposit has been transferred to a “VAT confiscation” state.
Once the status changes to “VAT confiscation”, the VAT registered person will be entitled to recover the VAT through his VAT return filing in the respective VAT return filing period or within five years from the end of the calendar year where that input VAT became recoverable, provided all other conditions to recover input VAT are met.
