Is VAT charged on service charges for an apartment?

Article 43 – Exemption of Residential Buildings 1. The supply of residential buildings is exempt, unless it is zero-rated, where the lease is more than 6 six months or the tenant of the property is a holder of an ID card issued by Federal Authority for Identity and Citizenship. 2. The period of tenancy referred to in Clause 1 of this Article shall be identified with reference to the contractual period of tenancy and shall not take into account any period arising from a right or option to extend the period of tenancy or renew the tenancy. 3. For the purposes of Clause 1 of this Article, a right of any party to terminate the lease early shall be ignored.

5. Other Goods and Services supplied by educational institutions Educational institutions (qualifying and non-qualifying) may provide a range of other Goods and Services to students, and the institutions should determine the correct VAT treatment thereof. Some commonly provided Services and their VAT considerations are set out below. 5.1. Accommodation Educational institutions often provide accommodation to students and staff. In some cases, this may qualify as a supply of a Residential Building. A supply of a Residential Building 13 is exempt from VAT, but can in some instances qualify for zero-rating. Further information on what qualifies as a Residential Building and the VAT treatment thereof is set out in the Real Estate VAT Guide (VATGRE1). Where additional Services or facilities are provided, the educational institution should consider whether it is supplying a Residential Building or a serviced unit. The supply of units with additional services constitutes a Taxable Supply at the Standard Rate of 5%. 5.1.1. Student accommodation Educational institutions may provide additional services with the accommodation, often for a single fee. The educational institution must consider whether it is making a single composite supply or multiple supplies. For example, where an educational institution makes available a shared lounge for residents or cleans common areas of the campus, this will be regarded as closely linked to and, therefore, part of a single composite supply of accommodation. In contrast, the provision of components such as cleaning inside the rooms, laundry facilities and catering would, generally, be considered a supply of a serviced unit. A supply of a serviced unit is subject to VAT at the Standard Rate, regardless of whether the supply qualifies as a single composite supply.14 5.1.2. Staff accommodation Where an educational institution provides a Residential Building to staff for a charge or a salary deduction (for example, in lieu of a living allowance), this would, generally, 13 Article 37 of the VAT Executive Regulation. 14 Article 4 of the VAT Executive Regulation. VAT Guide | Education | VATGED1 13

Article 46 - Supply Exempt from Tax19 The following shall be exempt from Tax: 1. Supply of financial Services that are specified in the Executive Regulation of this Decree-Law. 2. Supply of residential buildings through sale or lease, other than that which is zerorated according to Clauses 9 and 11 of Article 45 of this Decree-Law. 3. Supply of bare land. 4. Supply of local passenger transport. The Executive Regulation of this Decree-Law shall specify the conditions and controls for exempting the supplies mentioned in the preceding Clauses of this Article. Chapter Three – Single and Mixed Supplies