Source gov.bh
Stock that is no longer used, can no longer be traded and is not usable or needed, usually because something newer and better has replaced it.
Disposal of obsolete stock for no consideration is not considered a supply of goods for VAT purposes. Therefore, VAT payers who have disposed of their obsolete stock will not be obliged to account for VAT on the stock, provided they keep the documents listed at FAQ 9.10 below and, where applicable, dispose of obsolete stock in accordance with Bahraini law or other applicable rules issued by the Supreme Council for Environment, Ministry of Industry, Commerce and Tourism or other competent authority.
VAT payers will not be required to adjust any input VAT claimed relating to obsolete stock, provided they keep the documents listed at 9.10 below and, where applicable, dispose of obsolete stock in accordance with Bahraini law or other applicable rules issued by the Supreme Council for Environment, Ministry of Industry, Commerce and Tourism or other competent authority.
- A description of the stock disposed of (e.g. item code, SKU, description);
- The purchase price of the stock disposed of and the VAT claimed on acquisition of the stock;
- The reason(s) why the stock was considered obsolete;
- The method of disposal (scrapping, destruction etc);
- Where the goods comprise hazardous materials which were required under Bahraini laws or guidance issued by any competent government authority or agency to be disposed of quickly to avoid damage to human health, property etc, evidence that the goods were disposed of in accordance with the relevant laws or guidance; and
- Evidence that the stock has been written off in its financial statements.
The NBR may request any additional information it considers necessary to evidence that stock disposed of was obsolete.
