Imposition of VAT on transactions involving Immovable Property
On 3rd November 2017, the Cyprus Parliament has passed the amended VAT Act by which a standard rate of 19% VAT, was imposed on certain transactions involving immovable property that are carried out for business purposes and that currently are exempt from VAT.
The imposition of VAT on buildable land came into effect on 2nd January 2018.
The provisions relating to the leasing/or letting of immovable property other than the ones used as residence will enter into effect as from 13/11/2017.
The main changes in the Law are the below:
- The transfer of undeveloped buildable land that is intended for the construction of one or more fixed structures, in the course of economic activities of the transferor,
- The leasing and/or letting of immovable property to a taxable person for the purposes of carrying on taxable activities, except for the leasing of a buildings used for private dwellings,
- the reverse charge procedure for supplies of buildings, which are subject to VAT (new and incomplete), as well as, for buildable land when it is transferred to the financier under a loan restructuring procedure or under a transfer enforced by the lending party.