Insider Business Market turmoil after 19% VAT imposed on land sales

Market turmoil after 19% VAT imposed on land sales

Ever since the identification of gaps in the bill imposing 19% VAT on building land sales in the course of a business activity, the market is in a state of chaos.  

Seventy-five days after the bill came into force, the Parliamentary Committee on Financial and Budgetary Affairs tabled the main problems arising from ambiguities in the bill, with the Commissioner of Taxation seeking the help of the Parliament. One of the problems identified concerns incidental land sales.

The Committee mentioned that the circular of the Tax Department states that in case of incidental land sales no VAT is levied. Ιt was, however, later ascertained that VAT is imposed when land is purchased in an area where real estate and plots are of great value.

Another matter arising is the purchase of land through leasing. In the event that a plot is purchased via leasing, the buyer is obliged to pay both VAT and transfer fees. In this regard, the members of the Committee will table a legislative proposal to amend the bill as to reduce the tax burden imposed on buyers.

Another issue that needs to be addressed is that of newly-weds having to pay the tax when purchasing land to build their home. Today, newly-weds pay 19% VAT on the purchase of the plot and 5% VAT on construction undertakings. On the contrary, those who purchase a residence from a land development company only pay a total VAT of 5%.

Within the next few days, the Commissioner of Taxation will be filing a note to the House of Representatives, identifying the problems arising from the application of the legislation as well as the four circulars issued by the Department, specifying which land sales are subject to VAT. The members of the Committee will revisit the matter as to regulate legislative and other issue arising from VAT.

Top Stories

13-Cyprus back to double digits but no cases yet out of Larnaca and youth sampling programmes

  13 new cases of Covid-19 were detected in Cyprus in the past 24 hours out of a total of 3 thousand 220 diagnostic tests. The...

Police probe launched on Cyprus Investment Programme

  The Attorney General's Office has instructed police to start taking testimony in establishing possible criminal offences in the Cyprus Investment Programme following the conclusions...

Turkey issues latest NAVTEX in Aegean sea as tempers rise

  Turkey has continued its NAVTEX issuing tactics in the Aegean sea by issuing yet another maritime directive, this time involving a real fire military...

Paris knife attacker suspect confesses

  The man believed to have attacked and wounded two people with a meat cleaver is cooperating with the police and said he had targeted...

UK has no intention of approving direct flights to occupied north Cyprus

  The British government has once again officially made clear that it has 'no plans to approve direct flights between the UK and north Cyprus'. The...

Taste

Sheftalies

Sheftalies, a very tasty dish from the charcoal grill, are minced meat shaped into small sausages and wrapped in “panna” (suet). Panna is a...

Spicy grilled soutzoukakia

Place all ingredients for soutzoukakia in a bowl and mix well, preferably using a food processor, until well combined. Using the mixture, form cigar-shaped...

Souvlakia

Pork souvlaki: Put the meat and all the other ingredients in a bowl (not metal) and mix well. Cover the bowl and keep in...

Pastelli (Carob Toffee)

The nutritional sweet of Pastelli is made with the syrup of carob pods, produced by boiling their pulp until it forms a thick, sticky...