On 30/11/2017 the House of Representatives in Cyprus and in
accordance with the EU Value Added Tax (VAT) Directive voted a new
VAT Law which amends principle VAT Law N.95 (1)/2000. The new bill
imposing Value Added Tax (VAT) on building land was set in motion
on the 2nd of January 2018.
VAT imposition on the leasing and/or rental of business
premises
The new VAT provisions also apply to lease agreements which were
finalised from 13 November 2017 onwards, provided
that the taxable individual is renting the premises as part of
his/her taxable business activities (residential dwellings are
excluded). VAT will apply at the standard rate, which is currently
at 19%.
The new provisions of the law provide that the lessor has the
right (through an irrevocable option) to choose to opt out of VAT
under certain conditions and procedures, which are still to be
confirmed by the Tax Department on the issuance of a Circular.
