South Africa Tax Agency Clarifies VAT Treatment of Student Accommodations

The South African Revenue Service March 31 issued VAT Ruling No. VR 015, clarifying the VAT treatment of student accommodations. The taxpayer, a building developer for student accommodations, supplied furnished accommodations to students with other amenities optional. The taxpayer sought clarification on VAT treatment. Upon review, the Tax Agency clarified that: 1) the supply constituted a commercial accommodation under the VAT Act and was, therefore, subject to the standard VAT rate; 2) the taxpayer could deduct qualifying input tax on construction and development costs; 3) the standard VAT rate applied to student lease payments; 4) the taxpayer could deduct input ...