Good morning,
I have been searching through section 11 and 12 of the VAT Act for answers, but to no avail.
Can anyone assist me with the following question:
Why do motor vehicle dealers not charge VAT on warranty invoices charged?
For example, something breaks on a car which is under warranty. The client does not pay, but the manufacturer pays. Therefore a warranty invoice (no VAT) is issued to the client and submitted to the manufacturer as a claim to pay back.
Is it possibly because the dealer is only the agent, not the seller?
The nearest answer I could get, is when a warranty plan is sold to a non-resident, in which case the transaction is zero rated.
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