Cyprus’ Commissioner of Taxation published Circular 2/2025 on 24 March 2025, outlining guidelines for rental property owners who haven’t opted to exempt their property from VAT. The circular is valid until 31 December 2025.
In Cyprus, renting or leasing non-residential property to a taxable person for business activities is subject to the standard 19% VAT. These rules apply to leases concluded or renewed (not automatically) on or after 13 November 2017. Property lessors can choose not to charge VAT on rentals if conditions are met by notifying the Commissioner of Taxation with form TD1220 within 30 days of signing the lease.
Rental property owners who have not previously notified the Commissioner of Taxation of their choice can now submit form TD1220 by 31 December 2025, provided they have not charged VAT on the lease and have complied with all direct tax related tax obligations related to the lease, including income tax, healthcare contributions, and special defence contributions.
From 1 January 2026, property lessors must notify the Commissioner of Taxation of their option by submitting form TD1220 within 30 days of signing the lease agreement. Extensions may be granted if needed.
