Imposition of VAT on Immovable Property
On 3rd November 2017, the House of Representatives has passed the amended VAT Act imposing 19% VAT on the transfer of buildable land as well as on the leasing of immovable property other than the ones used as residence.
In the same amendment, the Parliament has also voted for the application of the reverse charge procedure for supplies of buildings, which are subject to VAT (new and incomplete), as well as, for buildable land when it is transferred to the financier under a loan restructuring procedure or under a transfer enforced by the lending party.
Whilst the amended Law with regards to the imposition of VAT on buildable land will come into effect on 2 January 2018, the imposition of VAT on the leasing of qualified property is the date the law will be published in the Government Gazette.
Since these amendments require further examination and clarification, which are soon expected to be provided by the Tax Department, a new Indirect Tax Update will be issued explaining in more detail the provisions of the new law.