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Deduction & Netting of Tax

Bahrain VAT Law

Input Tax Deduction

Article 42 states that

a) Tax paid on input supplies during the tax period would be eligible for deduction against output tax.

b) Tax Paid during imports in another implementing state (which is first entry and Kingdom is final destination point of entry)

c) Input tax is not allowable for

- Goods and services used for other than Economic Activities ( i.e non business purposes)

- Paid on Goods prohibited in the Kingdom

- Paid on imports of exempted supplies in the Kingdom


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