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[FAQ] VAT On Commercial Accommodation
- 28 July 2023
- VAT
- The Tax Faculty Tax Specialist
This article is based on tax law for the year ending 28 February 2023.
Question:
We are conducting a commercial rental business, that is, we lease offices and warehouses to businesses. Since our clients have been here for more than 28 days, does this mean we should charge VAT on 60% of the rent we charge customers?
Answer:
The VAT Act allows vendors offering commercial accommodation to charge VAT on 60% of the all-inclusive fee if the stay is continuous for 28 days or longer. However, it specifies the criteria for commercial accommodation, limiting only those who meet the definition to apply this rule. Commercial accommodation that qualifies includes board or board and lodgings supplied together with domestic goods and services in a house, flat, apartment, room, hotel, guest house, etc. The commercial rental, i.e., office space and warehouses, does not meet this definition.
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