This announcement relates to the VAT Circular 2/2025 issued by the Cyprus Tax Department.
An additional extension has been granted to lessors who have not previously filed Form TD 1220 and wish to elect not to apply VAT on commercial leasing or rental arrangements. The deadline for exercising this option has now been extended to 31 March 2026, from the previous date of 31 December 2025.
The ability to opt out remains subject to the requirements set out in the Circular, including that:
- the opt-out form has not been submitted in the past;
- VAT has not been charged on the relevant lease or rental; and
- the lessor is compliant with all direct tax obligations.
Please note that as of 1 April 2026, any new election to opt out must be submitted using Form TD 1220 within 30 days from the date of signing the lease or rental agreement.
In light of the revised deadline, lessors wishing to opt out in respect of existing lease arrangements are advised to proceed promptly to ensure submission by 31 March 2026.
We, at KSA, remain at your disposal should you require any further information or assistance in relation to this matter.
