LABOUR ACCOMMODATION- RESIDENTIAL VS SERVICED PROPERTY

LABOUR ACCOMMODATION- RESIDENTIAL VS SERVICED PROPERTY

INTRODUCTION :

 • Labour camps and Labour accommodation are generally areas where labourers are housed by their employers.

• They can take many different forms and some may provide residents with additional services on top of the living accommodation

 

LABOUR ACCOMMODATION AS A RESIDENTIAL PROPERTY :

  • • The building or lodging is occupied by the employees as their principal place of residence
  • • It is a building which is fixed to the ground and which cannot be moved without being damaged
  • • The building has been constructed or converted with lawful authority
  • • It is not a building which is similar to a hotel, motel, bed & breakfast establishment or serviced apartment for which services in addition to the supply of accommodation are provided
  • • It will be Exempt from VAT or zero-rated if it’s the first supply

 

 

LABOUR ACCOMMODATION AS A SERVICED  ACCOMMODATION  :

  • • In certain cases, residents may be provided with additional services on top of the living accommodation.
  • • In such cases, it is necessary to consider whether the extent of the additional services provided would move the supply from one of residential accommodation to serviced accommodation. Each scenario must be assessed on its actual facts.
  • • It will be charged at Standard rate

 

SERVICES NORMALLY SUPPLIED ALONG WITH  RESIDENTIAL 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.
  • • Access to facilities within the building for residents to use themselves,e.g. Launderette facilities, Gym, Pool, Prayer rooms etc.

 

ADDITIONAL SERVICES INDICATING SUPPLY OF SERVICED ACCOMMODATION :

  • • Telephone and internet access
  • • Cleaning of the rooms, other than purely the communal areas of the property
  • • Laundry services, including the regular changing of bed linen
  • • Catering & Maintenance services other than those required for the general upkeep of the property

 

MIXED VS COMPOSITE SUPPLY :

 

A) SINGLE COMPOSITE SUPPLY :

a) Where there is a supply of all of the following:

1. A principal component

2. A component or components which either are necessary or essential to the making of the supply, including incidental elements which normally accompany the supply but are not of a significant part of it; or do not constitute an aim in itself, but are instead a better means of enjoying the principal supply

b) Where this is a supply which has two or more elements so closely linked as to form a single supply which it would be impossible or unnatural to split

 

NOTE :

  • • The price of the different components of the supply is not separately identified or charged by the supplier.
  • • All components of the supply are supplied by a single supplier
  • • Even where it is considered that a single composite supply is being made, it shall be prevented from being treated as such if the various components are supplied by different suppliers or where the prices of each component are separately listed out
  • • Simply charging a single price does not, however, automatically mean a single composite supply is being made

 e.g. if there is not an identifiable principal component.

 

Where a single composite supply is made, the entire consideration for the supply shall be subject to the VAT treatment of the principal component

 

 

B) MULTIPLE COMPOSITE SUPPLY :

  • • Where a supplier supplies more than one component for one price and the supply is not a single composite supply, then the supply of the components shall be treated as multiple supplies i.e. whether they are subject to VAT or not.

 

Where a mixed supply is made, each component part must be valued and the correct VAT treatment applied to each component part

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