Following the amendment of the VAT legislation with regards to the imposition of VAT on the sale of building land and immovable property leasing, the Cyprus Parliament and the Tax Department have released Regulations and Circulars clarifying the applicability of VAT imposition on non-developed land as well as on commercial rents taxation.

It is reminded that on the 3rd of November 2017, the Cyprus Parliament approved the relevant VAT amendments, aligning the Cyprus VAT legislation with the EU VAT Directive (Article 383). Under the amended law, VAT was introduced at the standard rate (19%) for the sale of building land and the leasing/rental of business premises as well as an introduction of the reverse charge mechanism for supplies of land and property under a loan restructuring/force-sale arrangement that are subject to VAT.