Cyprus is to impose VAT on land sales for commercial activities
- Oct 14, 2017
- 1 min read
Cyprus is to impose VAT at a rate of 19 % on land sales for commercial activities, which will be based on the Dutch model.
Cyprus Tax Department has issued a circular defining land that will be subject to VAT as “transfer of undeveloped build-able land which is clearly intended for the construction of one or more fixed structures.”
According to the circular no VAT will be imposed on the on the purchase or sale of land located in a livestock zone and non-development areas, zones/areas of environmental protection, archaeological, rural, etc. Cyprus faced hefty fines from the European Commission if it failed to transpose the EU VAT Directive into national law. When it joined the EU in 2004, Cyprus was granted derogation from the directive, allowing the island to continue exempting the supply of building land until December 31, 2007.
Comments