WITH THE BLESSING of the European Commission, Cyprus will apply the Dutch model to the imposition of VAT on the purchase and sale of land for commercial activities at the rate of 19 per cent according to reports in the Greek language media.
The Tax Department has issued a circular defining land that will be subject to VAT as “transfer of undeveloped buildable land which is clearly intended for the construction of one or more fixed structures.”
According to the circular no VAT will be imposed on the on the purchase or sale of land located in a livestock zone and non-development areas, zones/areas of environmental protection, archaeological, rural, etc.
Cyprus faced hefty fines from the European Commission if it failed to transpose the EU VAT Directive into national law. When it joined the EU in 2004, Cyprus was granted derogation from the directive, allowing the island to continue exempting the supply of building land until December 31, 2007.
I was thinking ‘well done’ until a read-on and discovered this should’ve been done 10 years ago.
Just imagine how much green-and-pleasant could still be there….