Article 61 - Right to deduct Input Tax paid prior to VAT registration date

A. A Taxable Person shall be entitled to deduct Input Tax incurred on Goods and Services supplied to him or imported by him prior to the date of registration for Tax purposes in accordance with the following conditions

1. The Goods must have been supplied to him or imported within a period not exceeding five years prior to the effective date of registration of the Taxable Person for Tax purposes and shall still be in the possession of the Taxable Person on the effective date of his registration for Tax purposes.

2. The Services must have been supplied to him within a period not exceeding six months prior to the effective date of registration of the Taxable Person for Tax purposes.

3. They must have been supplied to him or imported within the course of his Economic Activity conferring the right to deduct Input Tax in accordance with the provisions of the Law and these Regulations.

B. A Taxable Person shall be entitled to deduct Input Tax incurred on Capital Assets supplied to him or which he imported prior to the effective date of his registration for Tax purposes provided that the following conditions are met:

1. Such Capital Assets must have a positive net book value at the effective date of the Taxable Person’s registration for Tax purposes.
2. They must have been supplied to him or imported for the purposes of his Economic Activity conferring the right to deduct Input Tax in accordance with the provisions of the Law and these Regulations.

C. The maximum deductible Input Tax permitted on a Capital Asset acquired or imported by the Taxable Person prior to the effective date of his registration for the Tax purposes shall be calculated on the basis of the net book value of the Capital Assets, determined in accordance with the accounting practice of the Taxable Person.

D. For the purpose of computing the adjustment period applicable to Capital Assets acquired or imported by the Taxable Person before the effective date of his registration for the purposes of Tax, the first year of the  adjustment period is deemed to start on the date of first use of the Capital Asset by the Taxable Person.