Cyprus Value Added Tax
Imposition of tax
Value Added Tax (VAT) is an indirect broad based consumption tax levied on supplies of goods and services provided in Cyprus and on imports.
Cyprus introduced VAT in 1992 by Law 246/90, which is based on the British VAT Legislation of 1983, adjusted to be consistent with the characteristics of the Cypriot economy. This VAT Law also contains some of the provisions of the Greek VAT Legislation of 1986.
In order to bring the Cyprus VAT Legislation in the line with the EU VAT Directive, VAT Law 95(I)/2000 was introduced along with several Regulations. Via the VAT Law 95(I)/2000 and the Regulations made thereunder, harmonization of the Cypriot VAT system with that of the EU was achieved to a great extend and at the same time the administrative and procedural framework was improved. The Law and the Regulations made thereunder came into force on the 1st of February 2002.
As form 1st May 2004 the VAT Legislation (Law and Regulations) were amended in order to incorporate the necessary provisions regarding intercommunity transactions (in view of Cyprus accession into the EU) as well as the applicable community acquis in the field of VAT in force as at that date.
Rates
- Standard rate 15%
- Reduced rate 8%
- Reduced rate 5%
- Zero rate 0%
Standard rate
The standard rate applies to any provision of goods and services in Cyprus not subject to the zero rate, the reduced rate or is exempt.
Reduced rate 8%
The reduced rate of 8% applies to:
- All restaurant services and any similar catering services (excluding the supply of alcoholic drinks, beer and wine), (From 1 May 2010).
- Accommodation in hotels, tourist lodgments and any other similar lodgments including the provision of holiday lodgments, (From 1 May 2010).
- Transportation of passengers and their accompanying luggage within the Republic using urban, intercity and rural taxis and by tourist and intercity buses.
- Movement of passengers in inland waters and their accompanying luggage.
Reduced rate 5%
The reduced rate of 5% applies to:
- The supply of fertilizers
- The supply of insecticides
- The supply of raticides
- The supply of fungicides
- The supply of foodstuff for animal
- The supply of seeds
- The supply of live animals used for the preparation of food
- The supply of non-bottled water
- Books, newspapers and magazines
- Sundry goods used by disabled persons
- Gas irrespective of packaging
- Ice-creams, ice-yoghourts, water-ice and similar products
- Salted or spicy products made with cereal or potatoes
- Salted or roasted or spicy nuts
- Funeral services
- Transportation of passengers and their accompanying luggage with urban and rural buses
- The letting of camping sites and caravan parks
- Bottled water, ready-made drinks, juices (excluding soft drinks, alcoholic drinks, beer and wine)
- The supply of vaccines for medical and veterinary (with certain exemptions)
- Entry fees to theaters, circus, festivals, luna parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and related places
- Entry fees at sports events and fees for using athletic centers
- Hairdressing services
- Repair and maintenance of private households after three years of first residence
- Supplies in the course of catering by school canteens
- Accommodation in hotels, tourist lodgments and any other similar lodgments including the provision of holiday lodgements. (From 1 May 2009 to 30 April
- 2010).
- Any package of services which includes accommodation in hotels, tourist lodgments, other similar lodgments, and holiday lodgments, and provision of breakfast or/and half board or/and full board or/and packages of services which include together with accommodation any other catering services including spirits, beers and wines. (From 1 May 2009 to 30 April 2010).
- All restaurant services and any similar catering services (excluding the supply of alcoholic drinks, beer and wine), (From 1 May 2009 to 30 April 2010).
Zero Rate
Zero rated supplies include the provision of food supplies, medicines, exports etc.
Exemptions
Exempt supplies include:
- Rental of immovable property
- Financial services (with some exceptions)
- Hospital and medical services
- Postal services
- Insurance services
- Disposal of immovable property where the application for building permission has been submitted prior to 1 May 2004.
Who is obliged to register for VAT in Cyprus
Every individual or company in Cyprus is obliged to register:
- At the end of any month, if the value of taxable supplies recorded in the last 12 months exceeds €15.600 or
- At any point in time the value of taxable supplies are expected to exceed €15.600 in the next 30 days.
Right of registration
Persons who trade, outside Cyprus, in goods or services which would have been taxable if they were provided within Cyprus, group of companies and company divisions.
VAT returns and payment of VAT
Any registered person in Cyprus must submit to the VAT Commissioner a VAT return within 40 days from the end of any tax period and pay the VAT due.
