Cyprus Tax Round-Up 2017: Part II

As we approach the turn of the year it is an appropriate time to summarize the various changes that have taken place to date in 2017 and look forward to the changes on the horizon.

In Part I of this two-part series,¹ I reviewed the double taxation agreements and direct taxation developments in Cyprus during 2017. In this Part II, I reflect on value-added tax and tax administration developments.

Value-Added Tax (VAT)

Imposition of VAT on building land

Law 157(I) of 2017 amends the VAT Law by imposing VAT at 19 percent on land transactions for business purposes, bringing it into line with the common EU system of VAT. When Cyprus joined the EU, it was granted a temporary derogation under Article 383 of the EU VAT Directive allowing it to continue to exempt the supply of building land from VAT, but this derogation expired almost ten years ago.