On 3rd November 2017, the Cyprus Parliament passed the amended VAT Act. Now a standard rate of 19% VAT is imposed on certain transactions involving immovable property that is carried out for business purposes and that currently are exempt from the VAT.
The new VAT on buildable land came into effect from 2nd January 2018.
The provisions related to the leasing or letting of immovable property other than the ones used as a residence are effective from 13th November 2017.
The main amendments to the Law are the following:
• 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 or letting of immovable property to a taxable person to carry on taxable activities, except for the leasing of 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.