VAT impacts different economic sectors in different ways. For insurance companies, the ability to recover the input tax paid on repairs performed by workshops on insured vehicles as part of the claim process has been a contentious issue since the implementation of VAT in Bahrain. Deductibles, excess and depreciation recoveries may have varied VAT treatment across different GCC states and therefore, insurers and reinsurers with operations across GCC must ensure their accounting systems are configured accordingly. Additions and deletions to group medical policies on account of employees joining and leaving the organisation may have an impact on VAT reporting for adjustments made in tax periods subsequent to the tax periods in which the policy was issued. Successful implementation of self-billing arrangements between insurers and brokers requires a robust system for data exchange to ensure that VAT registered brokers are not exposed to any VAT related risks.
Our insurance VAT specialists will assist you to navigate through the complexities and challenges by providing the right advice with practical solutions to the challenges faced by this sector.