Bahrain's National Bureau for Revenue (NBR) has issued a Public Clarification on VAT treatment for amounts claimed by a dealer from a manufacturer for repair services undertaken on faulty goods sold by the manufacturer to a dealer for onward supply to his customers where the repair services are covered by a manufacturer’s warranty. Broadly, the clarification covers the following points:
- Repair services provided by the dealer to the customer during the warranty period ;
- Reimbursement of repairs costs paid to the dealer from the manufacturer during the warranty period ;
- Third party warranty repair services ;
- Extended warranty periods ;
- Warranty repair services for goods sold prior to VAT implementation date;
- Recovery of VAT incurred by dealer established in Bahrain for the provision of warranty repair services.