Value Added Tax is imposed on the provision of goods and services in Cyprus as well as on the importation of goods into Cyprus.

Rates

Standard rate

15%

Reduced rate

8%

Reduced rate

5%

Zero rate

0%

Standard rate

The standard rate applies to any provision of goods and services in Cyprus not subject to the zero rate, thereduced rate or is exempt.

Reduced rate 8%

The reduced rate of 8% applies to:

·        All restaurant services and any similar catering

services (excluding the supply of alcoholic drinks,

beer and wine).

·         Accomodation in hotels, tourist lodgements and any other similar lodgements including the provision of holiday lodgements.

·         Transportation of passengers and their accompanying luggage within the Republic using

urban, intercity and rural taxis and by tourist and

intercity buses.

·         Movement of passengers in inland waters and their accompanying luggage.

Reduced rate 5%

The reduced rate of 5% applies to:

·         The supply of fertilizers

·         The supply of insecticides

·         The supply of raticides

·         The supply of fungicides

·         The supply of foodstuff for animal

·         The supply of seeds

·         The supply of live animals used for the preparation of food

·         The supply of non-bottled water

·         Books, newspapers and magazines

·         Sundry goods used by disabled persons

·         Gas irrespective of packaging

·         Ice-creams, ice-yoghourts, water-ice and similar products

·         Salted or spicy products made with cereal or potatoes Salted or roasted or spicy nuts

·         Funeral services

·         Transportation of passengers and their accompanying luggage with urban and rural buses

·         The letting of camping sites and caravan parks Bottled water, ready-made drinks, juices (excluding soft drinks, alcoholic drinks, beer and wine)

·         The supply of vaccines for medical and veterinary (with certain exemptions)

·         Entry fees to theaters, circus, festivals, luna parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and related places

·         Entry fees at sports events and fees for using athletic centres

·         Hairdressing services

·         Repair and maintenance of private households after three years of first residence

Zero rate

Zero rated supplies include the provision of food supplies, medicines, exports etc.

Exemptions

Exempt supplies include:

·         Rental of immovable property

·         Financial services

·         Hospital and medical services

·         Postal services

·         Insurance services

·         Disposal of immovable property where the application for building permission has been submitted prior to 1 May 2004.

Who is obliged to register

Every individual or company is obliged to register:

(a) at the end of any month, if the value of taxable supplies recorded in the last 12 months exceeds €15.600 or

(b) 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.

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.

Administration of intra-community trading

Merchandisers who undertake intra-community trading, i.e. purchases and sales from/to European Union member States need to complete the following forms:

Intra-Community Acquisitions

1. Intrastat - Arrivals

2. Inclusion in the VAT return (on a totals basis)

Intra-Community Supplies

1. Intrastat - Departures

2. Recapitulative schedule for supplies

3. Inclusion in the VAT return (on a totals basis with 0%).

When and where are they submitted?

INTRASTAT forms are submitted to the VAT authority no later than the 10th day which follows the end of the month stated on the INTRASTAT form. The VIES form is submitted to the VAT authorities within 40 days form the end of each calendar quarter.

Penalties and interest

Late registration

€85 for every month

of delay

Late submission of return

€51 one-off

Late payment of VAT

  10% of amount due

 plus 8% interest

Late de-registration

€85 one-off

Late submission

of Intrastat form

€8 for every working

day of delay with a

maximum of 30

working days

Late submission of

Recapitulative schedule

for supplies

€51 for every month of

delay with a maximum

of 3 months