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January 31, 2019 Cyprus Tax Department releases circular clarifying VAT treatment of long-term immovable property leases The Cyprus Tax Department recently released Circular 229 clarifying the Value Added Tax (VAT) treatment of long–term leases of immovable property. As from 1 January 2019, a long-term lease of immovable property which effectively transfers the right to dispose of the property as owner to the lessee constitutes a supply of goods subject to VAT. The factual circumstances of the lease will determine the VAT implications including VAT treatment and time of supply. Circular 229Circular 229 clarifies the implementation of the long-term leasing amendment by explaining that:
Business considerationsEntities involved in long-term leasing transactions of immovable property, as from 1 January 2019, will need to cover among others:
Next StepsTaxpayers should consider taking action with their local tax professionals in the following areas:
For additional information with respect to this Alert, please contact the following: Ernst & Young Cyprus Limited, Nicosia
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