VAT in Cyprus

VAT registration is mandatory for any company that provides goods or services in Cyprus above a certain limit. It is also imposed on the importation of goods into Cyprus, and on the acquisition of goods from the European Union (EU).

The standard rate is currently 19%, with reduced rates of 9% for various goods and services that affect the tourist industry, and restaurant and catering services, and 5% for some basic foodstuffs, pharmaceutical products, books and newspapers, as well as a list of other sundry items. There are also certain goods and services which are zero-rated, and others which are exempt from VAT altogether.

Businesses which make exempt supplies, such as immovable property, hospital and medical services, and insurance, financial and educational services, are not eligible to register for VAT. This means the VAT they incur on their purchases, expenses and imports cannot be recovered.

Taxable persons charge VAT on their taxable supplies (output tax), and they are charged with the VAT on the goods or services that they receive (input tax). If the output tax in a VAT period exceeds the input tax, then a payment has to be made to the state. If the input tax exceeds the output tax, either the balance can be carried forward and used as a credit against future VAT obligations, or a refund can be obtained. It should be noted, however, that our experience is that the Cyprus authorities are not known for making refunds on a timely basis, so best not to include rebates in any cash flow forecast!

A Cyprus company is obliged to register for VAT if:

  • At the end of any month, the valuable of taxable supplies for the preceding year (12 months) exceeded €15,600;
  • If there are grounds to expect that the value of taxable supplies in the next 30 days will exceed the €15,600 threshold; and
  • If the acquisition of goods from suppliers in other EU Member States exceeds €10,250.

Even businesses with turnover below the €15,600 limit can voluntarily register for VAT provided they are trading in taxable supplies.

Registration is achieved by completing the appropriate application forms and submitting them to your local VAT office. These forms can be obtained from your local VAT office or downloading them from the relevant government website ( Unfortunately, the forms are currently only in Greek, and can be something of a challenge to complete for the uninitiated. A VAT number is normally issued within 2 weeks of the application being submitted.

VAT returns must be submitted quarterly, with the payment of any VAT due made within 40 days of the end of each quarter.

From May 2017, all VAT declarations should be submitted electronically through the Taxisnet system. Again application for Taxisnet registration can be made either online or through your local VAT office.

If you are selling to another EU business that is registered for VAT then, under the so-called reverse charge mechanism, there is no need to add VAT when invoicing them. However, this will need to be reflected in the VAT return and eligible businesses are required to register and report such transactions online through the VIES (VAT Information Exchange System).

VAT is an unfortunate fact of life for many businesses, but, in most cases, one that cannot be avoided. The rules can be complicated, especially when dealing with transactions with companies in other EU member states, and when making a distinction between so-called B2B (Business to Business) and B2C (Business to Consumer) transactions, and between the supply, and acquisition, of goods as opposed to services.

If the idea of registering and then reporting VAT seems daunting, however, there is help at hand. AJD Consultants have registered many Cyprus companies for VAT, have Taxisnet and VIES registration fro them, and prepared and submitted numerous returns. We can advise on some of the complexities you may face in preparing your returns, and, more specifically, with the interpretation of the rules and their application.

Please contact us for further information and advice.



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