Cyprus: Amendment regarding imposition of VAT on supply of buildings

An amendment regarding conditions that must be satisfied for imposition of VAT on supply of buildings

An amendment regarding conditions that must be satisfied for imposition of VAT

Article Posted date 28 November 2022

The Council of Ministers approved an amendment regarding the conditions that must be satisfied for the imposition of value added tax (VAT) on the supply of buildings. The amendment is effective 11 November 2022.

Prior to the amendment, the supply of buildings was subject to VAT provided it occurred prior to first use by any means following construction, including self-occupancy, own use, rental or any other use. Under the amendment, the supply of buildings before first occupation no longer constitutes a criterion for the imposition of VAT. Rather, the supply will be subject to output VAT in the following circumstances:

  • On the first supply of a building within five years since its completion
  • In cases of succeeding supplies of the same building taking place after the first supply within five years since its completion

In both cases, the supply will be subject to VAT only if the building has not been used on a continuous basis by a non-related party for a period of at least 24 months.

Any supply of a completed building beyond the period of five years will be exempt from VAT regardless of whether it has been used or not. 

Read a November 2022 report prepared by the KPMG member firm in Cyprus

 

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