Cyprus Changes Rules of Property Selling Taxes

На Кипре меняют правила налогового режима для проданной недвижимости
26 February 2021 Liza Medvetskaya
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Some problems with property selling taxes have been identified in Cyprus.

As it turns out many property owners do not submit income declaration or other documents that would facilitate a decision on proper taxation.

It causes delays in the work of the tax department. To solve the problem, the Cyprus Tax Department issued an executive directive.

It is worth noting that most of the sales come from commercial entities working in the real estate sector. According to the law, the initiator of the sale is the mortgage lender, who is not obliged to file a declaration of income from the sold real estate, which complicates the process of correct taxation.

На Кипре меняют правила налогового режима для проданной недвижимости

In this regard, the Tax Department decided, when considering sales cases, to make an objective study of marketing criteria for each case separately:

  • If it is obvious that the transaction is of a marketing nature, since the sold property comes from persons engaged in the exploitation of land or real estate trade, then it becomes subject to income tax.
  • In case of failure to submit a declaration of income by the owner or the relevant documents from the mortgage lender regarding the calculation of profit or loss from the sale, the tax department employee independently determines the amount of income tax that must be paid.
  • If the sold real estate comes from persons of other categories, it is necessary to fill out a questionnaire, based on the results of the audit, and then it should decided whether income tax on profit or loss or capital gains tax will be paid

Claims for the refund of the paid amounts of tax will be considered after filing the declarations of income of real estate owners or making objections.

When the competent department collects tax in connection with the sale, they should notify the mortgage lender and taxpayer in writing. In the event of an objection and a decision on the refund of tax amounts, this should be done with the written agreement of the mortgage lender and the owner of the property, the agreement should have the indication to whom of them the declaration should be submitted. All this will take place on the basis of the decision of the district court.

Source: philenews.com
Photos: pixabay.com
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