Value Added Tax is imposed on the provision of goods and services in Cyprus as well as on the importation of goods into Cyprus.
Standard rate 19% as of 13 January 2014
Reduced rate of 9% 9% as of 13 January 2014
Reduced rate of 5% 5%
Zero rate 0%
The standard rate applies to any provision of goods and services in Cyprus not subject to the zero rate, the special rate or is exempt.
Reduced rate of 9%
The reduced rate of 9% applies to hotel services, to the provision of food in the course of catering, and to public transport.
Reduced rate of 5%
The reduced rate of 5% applies to the suppry of specific goods such as fertilizers and pesticides, water, books and other publications, food and drinks, gas, medicine, etc. The reduced rate of 5% also applies to the supply of specific services such as dental services, entertainment services, services related to sports, etc.
Zero rated supplies include medicine and food (except the supply of food in the course of catering), goods entered into a customs regime and certain services related to sea-going vessels.
Exempt supplies include most financial services, insurance services, rental and disposal of immovable property, hospital, medical and dental services, educational and sports services, postal services and services provided by charitable organizations.
Who is obliged to register
Every individual or company 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 the Republic, in goods or services which would have been taxable if they were provided within the Republic, group of companies and company divisions.
As under the new legislation there is no longer a distinction between local companies and IBCs, the IBCs are subject to the same registration procedures as local companies. In most cases this benefits IBCs as their activities fall outside the scope of VAT while at the same time they can register on a voluntary basis and recover any input VAT on Cyprus expenses.
VAT returns and payment of VAT
Any registered person must submit to the VAT Commissioner a VAT return within 40 days from the end of any tax period and pay the VAT due.