The Cyprus Tax Department has issued critical clarifications regarding the transitional provisions for the reduced 5% VAT rate on primary residences under amending Law N.109(I)/2026. The transitional regime remains strictly tied to properties where a planning permit was issued or applied for by October 31, 2023, applying only to the first 200 square meters of buildable area. Crucially, a strict filing deadline of June 15, 2026, has been established for cases where the planning application was submitted by the October 2023 threshold and the building permit was issued on or before December 31, 2024. Eligible declarations must be submitted electronically through the Tax For All (TFA) portal, and missing these specific deadlines will result in losing the 5% VAT benefit.

The Cyprus Tax Department has announced that Form T.F.1220, the "Responsible Declaration" for the non-imposition of VAT on the lease or rental of immovable property, must now be submitted exclusively through the Tax For All (TFA) portal. This shift, formalized by Notification Κ.Δ.Π. 172/2026, marks another step in the complete digitalization of Cyprus's tax framework. Property owners and business entities must now ensure their electronic filings are accurate and submitted through this centralized platform to maintain compliance.

The Cyprus 2026 Tax Reform (pending approval) modernizes the system with these key shifts:

• Corporate: Rate increases to 15% (from 12.5%); Dividend tax drops to 5% (from 17%).

• Personal: Tax-free threshold raised to €20,500; new tax credits for families and students.

• Crypto: New flat 8% tax on profits from disposal/exchange.

• Real Estate: Rental SDC abolished; property swaps are now tax-free.

• Compliance: Mandatory tax returns for all residents over 25; stricter powers for the Tax Commissioner to seal non-compliant businesses.

Auditors are publicly appointed and have the professional task of carrying out business audits andissuing audit opinions on the performance and result of such audits, in particular audits of annual financial statements of economic enterprises. This is regulated in Section 2 (1) of the Act on the Professional Code of Conduct for Auditors. Furthermore, there is the legal obligation for companies to have their business figures certified by an auditor - the so-called auditor's certificate.

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