Exempt Property Transactions from the Value Added Tax (VAT) – Act 157(I) 2017
The Value Added Tax Law of 2000 (95 (I) / 2000) – 157(I) 2017 as described in the eight Appendix, (Article 39) Immovable Property, in Cyprus
According to this amended law the following transactions are exempt transactions from the Value Added Tax (VAT)
- a) letting of immovable property, excluding –
(i) the provision of accommodation within the hotel or similar sector, including accommodation in camp sites,
(ii) the hiring of premises or spaces for parking vehicles,
(iii) the hiring of equipment and machinery permanently installed,
(iv) the hire of safes, and
(v) the letting of immovable property specified in paragraphs 1 (b) to 4 of this paragraph, with the right to acquire,
(vi) the letting and/or renting of immovable property to a taxable person for the purposes of taxable business, except in the case of the letting of a building used as a dwelling:
Provided that the tax covers rental and/or rental of a building whose lease and/or lease date is commenced on or after the entry into force of the Value Added Tax (Amendment) Act No 3 of 2017:
It is further provided that the lessor may choose to inform the Tax Officer of the non-taxation of the rental and/or rental of immovable property under terms and conditions specified in a notice from the Tax Officer, published in the Official Gazette of the Republic:
Furthermore, the lessor’s initial choice of non-taxation of the letting and/or rental of immovable property on the basis of the provisions of the second reservation cannot be differentiated by the lessor subsequently.
(b) the supply of immovable property with the exception of the following transactions:
(i) the transfer of buildings or parts thereof and of the land transferred with them or of an indivisible ideal portion thereof if carried out prior to their first establishment,
(ii) transfer of ownership of buildings or parts thereof and of the land transferred with them or an indivisible ideal portion thereof, under a contract of sale or under an agreement expressly providing for the transfer of the buildings together with the land transferred together with them at a certain time in the future or leased with the right to take over, if they are carried out prior to the first establishment in them,
(iii) transfer of ownership, transfer from an indivisible ideal share, transfer of ownership under a contract or a sale agreement or under an agreement which expressly provides that the ownership will be transferred at a future time, or under a lease with the right to acquire uncultivated buildable land is intended for the construction of one or more fixed structures and is carried out in the course of an economic activity:
It is understood that the Council of Ministers has the power to issue Regulations approved by the House of Representatives to determine the category of land plots falling under the concept of undeveloped building land as well as the time point considered as time of the transfer.
It is further understood that the provisions of subparagraph (iii) do not include the supply of land –
(a) Transferred under the provisions of the Transfer and Real Estate Law before the entry into force of the Value Added Tax (Amendment) (No 3) of 2017;
(b) for which a sale contract has been submitted to the competent authority for the purpose of the Sale of Real Estate Law or the Tax Officer prior to the entry into force of the Value Added Tax (Amendment) (No.3) Law
For more information and guidance please email Michalaki, Pitsillidou & Co LLC – iMPK Global Business Law Firm – Cyprus Lawyers, at firstname.lastname@example.org or visit our website at www.impklawyers.com Tel. +357 25660092 – Fax +357 25 660097.