VAT

May 9, 2019

VAT on Long-Term Leases of Immovable Property

The Cyprus Tax Department issued on 27 December 2018 an Interpretative Circular (EE229 – VAT treatment of the effective transfer of the right to use an immovable property), clarifying the treatment the application of the amending Act with number 39(I) of 2018 which has come into force on 1 January 2019.
April 18, 2018

Taxation of Rents in Cyprus for Value Added Tax Purposes (Interpretative VAT Circular-Letting of Immovable Property)

Following the recent legislative changes (Law 157 (I) / 2017) enacted by the House of Representatives of Cyprus, for the purposes of harmonizing legislation with the EU Value Added Tax (VAT) Directive, we set out below how the transactions relating to the letting of immovable property in Cyprus will be treated for VAT purposes.
April 4, 2018

Imposition of Reduced VAT Rate of 5% for the Acquisition and/or Construction of a House for Use as Main and Permanent Residence

The reduced VAT rate of 5% applies to contracts concluded after 1 October 2011 provided they relate to the acquisition and/ or construction of residences to be used as the primary and permanent place of residence for the next 10 years. Certain conditions must be met in order to qualify for the submission of the relevant application to the tax commissioner.
January 1, 2018

VAT and Holding Companies: (VAT Interpretative Circular-VAT Treatment of Holding Companies)

The Circular distinguishes between cases whereby there is simple purchasing and holding of shares in companies and where there is management or administration of companies in which shares are held. This fundamental distinction is what will determine whether input VAT can be recovered by the holding company.

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