Value Added Tax

  • VAT is imposed on the supply of goods and provision of services in Cyprus, as well as on the acquisition of goods from the EU and the importation of goods into Cyprus.
  • If output tax (VAT on sales) exceeds total input tax (VAT paid on purchases), a payment has to be made to the state. If input tax exceeds output tax, the excess input tax is carried forward as a credit and set off against future output VAT (an immediate refund can be obtained subject to conditions).
  • For intra-community acquisitions, the acquirer does not pay VAT on receipt of goods in Cyprus but instead accounts for VAT using the reverse charge mechanism (i.e it self-charges VAT and at the same time claims it back thereby creating no cost to the business).
  • For services rendered, as from 1/1/2011, VAT is chargeable in the country where the recipient of the services has established his business.
  • VAT rates
    • Zero rate (0%).
    • Reduced rate (5%).
    • Reduced rate of 8% (up to 12/1/14 and 9% as from 13/1/14).
    • Standard rate of 19% as from 13/1/14 (15% up to 29/02/12, 17% up to 13/1/13, 18% to 12/1/14).
  • Registration 
    • Registration threshold (taxable supplies in Cyprus)- €15.600
    • Registration threshold for acquisition of goods in Cyprus from suppliers resident in another EU member state- €10.251
    • Registration threshold for intra-community supply of services- No threshold
    • Registration threshold for receipt of services from abroad for which the recipient must account for VAT under the reverse charge provisions-  €15.600
  • VAT declaration
    • VAT returns must be submitted quarterly and payment of VAT within 40 days from the end of the VAT period (i.e. by 10 May for quarter ending 31/3).
    • If in a quarter input tax exceeds output tax, the difference is refunded or transferred to next VAT quarter.

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