Bahrain issues Public Clarification on VAT treatment of "Warranty Repair Services"

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.