Value Added Tax (VAT)-The construction of residential dwellings and residential rent |07 January 2013

In today’s article we will look at the construction of residential dwelling and residential rent vis-a-vis Vat.

Is Vat applicable on the construction of a residential dwelling?

NO. Any construction that is for residential purposes, which include the construction of private houses, block of flats and condominium, is exempt from Vat.

In other words there is no Vat on the constructions of ANY residential dwellings, even if the purpose will be to rent them out (for residential rent purposes).

Is Vat applicable on construction materials for residential dwellings?

YES. Vat is applicable at 15% on ALL construction materials imported at the point of entry at the time of import and on those purchased locally from a Vat-registered business, whatever their final use.

 This includes construction materials incorporated in the construction of the residential dwellings.

Will Vat be applicable on residential rent?

NO. Prior to January 2013 GST was being paid monthly at 15% on all residential income/rent.

 Although Vat has replaced GST effective January 1, 2013, Vat will not be applicable on residential rent.
 
However, as from January 2013 residential income/rent is liable to Business Tax, at the rate of 15% just as it was the case with GST.

 In other words the 15% is payable on the gross rental income.

Just like with GST in the past, the 15% is payable, on or before the 21st day of the following month in which the liability falls due using the Business Activity Statement (BAS).

For more information
You can contact Seychelles Revenue Commission on 4293745 or email us at vat@src.gov.sc.

 The Value Added Tax Act, 2010 is available on the Seychelles Revenue Commission website (www.src.gov.sc).