Labour Accommodation for VAT purposes

What is the treatment of Labour Accommodation for VAT purposes?

Labour Accommodation: Some of the labour accommodation will be treated as supply of residential property, and some of the labour accommodation will be treated as supply of serviced accommodation.

If the labour accommodation is considered as supply of residential property it will be treated as zero percentage or exempted. If additional services are given to a labour accommodation it will be treated as serviced accommodation and will be taxable at 5%.

However, the following basic services shall not be considered as part of serviced accommodation:

  • cleaning of communal areas
  • maintenance services required for the general upkeep of the property
  • pest control
  • garbage collection
  • security
  • utilities e.g. electricity, water, etc.

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