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26/01/2018

Amendment of VAT Legislation

The VAT law, 95(I) /2000 has recently been amended so as to bring the legislation in line with EU Value Added Tax.

Amendments in Brief

VAT on the Supply of Undeveloped Land

The supply and sale  of undeveloped land is subject to VAT at the rate of 19%, provided that the sale is done in the course of business activity. The criteria which should be taken into consideration when determining whether an activity is a business activity are, inter alia,:

  • Whether the activity has a certain measure of substance in terms of the quarterly or annual value of taxable supplies made
  • whether the activity is conducted on a regular basis and based on recognized business principals
  • whether the activity is an occupation which is actively pursued with reasonable or recognizable continuity.

VAT on the Rental of Properties

  • The lease or rental of immovable property to a taxable person for furtherance of the business is considered as a taxable transaction and it subject to 19% VAT
  • The amount of rent collected must be more than EUR 15,600.
  • Subject to the provisions of the VAT law, the lessor may opt for an exemption from the payment of VAT.