Cyprus Value Added Tax (VAT) guide and information
Value Added Tax was introduced in Cyprus on 1 July 1992 and is imposed on the provision of goods and services as well as on the importation of goods into Cyprus.
Standard rate VAT – 19% from 13 January 2014
Standard rate – 18% from 14 January 2013
Standard rate – 15% from 1 January 2003 (17% from 1 April 2012)
Reduced rate VAT – 9% (8% up to 12 January 2014)
Reduced rate – 8% from 1 January 2006
Reduced rate VAT – 5% from 1 July 2000
Zero rate VAT – 0% from 1 July 1992
Value Added Tax (VAT) Registration
Registration is compulsory for business:
- If the value of the taxable supplies is in excess of €15,600 during the 12 preceding months
- At any time, if the expected turnover is in excess of €15,600 in a period of 30 days.
- Provides services to a VAT registered person within the European Union with nil registration threshold
Businesses with an annual turnover of less than €15,600 have the option to register voluntarily.
The standard rate of 19%
The standard rate applies to the provision of all goods and services in Cyprus which are not subject to the zero rates, the reduced rate or are not exempt.
Reduced rate of 9%
The reduced rate of 9% applies to:
- All restaurant catering services (including the supply of alcoholic drinks, beer, wine, and soft drink). (Effective from 10 January 2011)
- Accommodation in hotels, tourist lodgments, and any other similar lodgments. (Effective from 1 January 2011)
- Transportation of passengers and their accompanying luggage within Cyprus using urban, intercity, water, and rural taxis and tourist and intercity buses.
Reduced rate of 5%
The reduced rate of 5% applies to:
- The supply of foodstuff and/or beverages (excluding alcoholic drinks, beer, wine, and soft drinks) or both, irrespective of whether the goods are delivered from the supplier to the customer or taken away by the customer. (Effective from 10 January 2011)
- The supply of pharmaceutical products. (Effective from 10 January 2011)
- Newspapers, books, and magazines
- Hairdressing services
- Entry fees to theaters, circus, festivals, Luna parks, concerts, museums, etc
- Entry fees at sports events and fees for using athletic centers
- Renovation and repair of private households after three years of the first residence
- Supply of catering services from school canteens.
The zero rate VAT applies to:
- The exportation of goods
- Repair, maintenance, chartering and hiring of sea-going vessels, which are used for navigation on the seas and carrying passengers for reward or used for the purpose of commercial, industrial or other activities
- Supply, modification, repair, maintenance, chartering and hiring of aircraft, used by airlines operating for reward mainly on international routes
- Supply of services to meet the direct needs of seagoing vessels and aircrafts
- Transportation of passengers from Cyprus to a place outside Cyprus and vice versa using a seagoing vessel or aircraft.
- Rental of residential property
- Insurance services
- Financial services (with some exceptions)
- Hospital and medical caring services
- Postal services
- Disposal of immovable property where the application for building permission has been submitted prior to 1 May 2004.
Penalties and interest
- Late registration – €85 for every month of delay
- Late submission of return – €51 for each return
- Late payment of VAT – 10% of the amount due plus 5% p.a. interest
- Late de-registration – €85
- Late submission of Intrastat form – €15 for each return
- Late submission of VIES return – €50 for each return.
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