VAT Law Amendment

On the 3rd of November 2017 the Cypriot Parliament amended the VAT Law which relates to the building land taxation in order for same to comply with the provisions of the EU VAT Directive since upon joining the EU, Cyprus was given a temporary derogation under article 383 of the EU VAT Directive (Council Directive 2006/112/EC of 28 November 2006) allowing it to continue to exempt the supply of building land from VAT but this derogation expired almost 10 years ago. The provisions of the New Law will be effective as from the 2nd of January 2018. The amendments that have come into force relate to the imposition of 19% VAT on the sale of building land, secondly the taxation of new commercial immovable property leasing contracts and lastly the application of reverse charge on transactions relating to transfers of immovable property during the process of loan restructuring.