VAT

Value Added Tax (VAT) Registration

Registration is compulsory for business:

• If the value of the taxable supplies is in excess/more of €15,600 during the 12 preceding months
• At any time, if the expected turnover is in excess/more 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 below €15,600 have the option to voluntarily register.

The standard rate of 19%

The standard rate applies to the provision of all goods and services 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.

VAT: Zero rate (0%)

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.
• Exempt supplies
• 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 

• For late registration – €85 for every month of delay
• Late submission of return – €51 for each return
• For late payment of VAT – 10% of the amount due plus 5% p.a. interest
• Late de-registration – €85
• For late submission of Intrastat form – €15 for each return
• Late submission of VIES (VAT Information Exchange System) return – €50 for each return.

For more information and/or advice, feel free to contact us via email at [email protected]