Cyprus V.A.T Information

  • - Value added tax is imposed on the supply of goods and provision of services, as well as on the acquisition of goods from the European Union and the importation of goods into Cyprus.

  • - Chargeable persons charge v.a.t. on their taxable supplies (output tax) and are charged with v.a.t. on goods or services which they receive (input tax).


- If the total output tax exceeds the total input tax then the difference must be paid to the Cyprus government. If the input tax exceeds output tax, the excess is carried forward as a credit and set off against future v.a.t.

- Immediate refund of excess v.a.t. can be obtained in the following cases:

  • i. A period of three years has elapsed from the date the v.a.t. became refundable.
  • ii. Input v.a.t. which cannot be set off against output v.a.t. until the last v.a.t. period of the year which follows the year in which the v.a.t. period in which the credit was created falls.
  • iii. The input v.a.t. relates to zero rated transactions.
  • iv. The input v.a.t. relates to purchases of capital assets of the company.
  • v. The input v.a.t. relates to transactions which are outside the scope of the v.a.t. but would have been subject to v.a.t. had they been carried out within Cyprus.
  • vi. The input v.a.t. relates to exempt financial and insurance services provided to non EU resident clients (services for which the right to recover the related input v.a.t. is granted).

  • - Any registered person has to submit to the v.a.t. Commissioner a v.a.t. return within 40 days from the end of the tax period and pay the v.a.t. due, if any.

  • - Businesses that undertake intra-community trading, i.e. purchases and sales of goods and provisions of services from/to EU member states need to complete the following forms:

 

Intra-community acquisitions

  • i. Intrastat – arrivals of goods
  • ii. Inclusion in the v.a.t. return (on a total basis)

 

Intra-community supplies

  • i. Intrastat – departures of goods
  • ii. Recapitulative statement for supplies of goods and services (VIES form)
  • iii. Inclusion in the v.a.t. return on a total basis
  • The rates are:

i. Standard rate applicable 19%
ii. Reduced rate 98%
iii. Reduced rate 5%
iv. Zero rate 0%

  • - Right for registration have 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.

 

  • - Any individual or company is obligated to register if:
  • i. At the end of any month, the value of its taxable supplies recorded in the last 12 months exceeds €15.600 or
  • ii. At any point of time the value of taxable supplies are expected to exceed €15.600 in the next 30 days.
  • iii. Provides services to a v.a.t. registered person within the European Union (nil registration threshold).
  • iv. Offers distant sales with registration threshold of €35.000.
  • v. Is involved in acquisition of goods from other European member states and relates to persons who offer exempt supplies of goods and services or are non profitable organizations with registration threshold of €10.250.
  • vi. Other zero rated supplies of goods or services.
  • vii. Acquires a company on a going concern basis.

  • Certain goods or services are exempt from v.a.t.:
  • i. The letting of immovable property (the letting of immovable property with the right to purchase is not exempt).
  • ii. Most banking and financial and insurance services.
  • iii. Most hospital, medical and dental care services.
  • iv. Certain cultural educational and sports activities.
  • v. Supplies of real estate (except supply of new building before their first use) including supplies of land and of second-hand building.
  • vi. Postal services provided by the national postal authority.
  • vii. Lottery tickets and betting coupons for football and horse racing.
  • viii. Management services provided by mutual funds.