VAT in Cyprus
VAT rates and vies registration.
VAT in Cyprus.
VAT in Cyprus is applied on the supply of goods or services in Cyprus, as well as on the acquisition of goods from the EU and the importation of goods into Cyprus.
Taxable persons charge VAT on their taxable supplies (output tax). When receiving good or services taxable persons are also charged with VAT (input tax). If output tax in a VAT period exceeds total input tax, 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.
Exports and certain related services, international air and sea transportation of goods and related services (except intra-community transport of goods), ship management services and services for the direct need of “qualifying” vessels, goods that are to be placed in customs warehouses/ bonded warehouses or free-zones and be subjected to the relevant customs regime or temporary importation/transit or transshipment regime, goods that are intended to be incorporated into drilling or production platforms
Reduced rate of five per cent
Supplies of food including drinks for human consumption Supplies of animal feeding stuff supplies of fertilizers, supplies of liquefied petroleum gas in cylinders, newspapers, books, magazines and similar supplies of various goods for incapacitated persons supplies of medicines which are used for medical treatment, illness prevention and medical and veterinary purposes, supplies of vaccines for medicine and veterinary medicine services of writers, composers and artists renovation and repair services to private residences (subject to certain conditions), fares for urban and rural areas by bus, catering services from school canteens, purchase or construction of a flat or house to be used as private main residence (under certain conditions), renovation and repair of private residences, purchase of residential property subject to criteria
Reduced rate of nine per cent
Restaurant services and other similar catering services which consist of the supply of manufactured or non− manufactured food or drinks or both for human consumption, including refreshment drinks, alcoholic beverages (beer and wine) accommodation provided by hotels and other similar establishments, including the provision of holiday accommodation transportation of passengers and their luggage by taxi
All supply of goods or rendering of services, except those taxed at 0%, 5%, 9% or exempt
VAT registration in Cyprus is compulsory.
Businesses with turnover subject to VAT in excess of €15.600 during the 12 preceding months or businesses with expected turnover subject to VAT in excess of €15.600 within the next 30 days are obliged to VAT registration. In the case of turnover less than €15.600 or with supplies outside of the VAT scope but for which the right to claim the amount of the related input VAT is granted, have the option to voluntary registration.
In addition, businesses that make acquisition of goods from other EU state members in excess of €10.251,61 during a calendar year, are also obliged to VAT registration. Obligation for VAT registration also arises for businesses engaged in the supply of intra-community services for which the recipient must account for VAT under the reverse charge provisions.
Registration is also compulsory when a business is carrying out financial activities from the receipt of services from outside of Cyprus for which an obligation to account for Cyprus VAT under the reverse charge provision exists subject to the registration threshold of €15.600 per any consecutive 12-month period. No registration threshold exists for the provision of intra-community supplies of services.
Voluntary registration is an option when:
An individual has a business establishment in Cyprus, or usual place of residence is Cyprus, and delivers supplies outside Cyprus which would be taxable supplies if delivered within the Cyprus territory.
VAT returns are electronically submitted every four months and the payment of the VAT must be made by the 10th day of the second month following the month in which the tax period ends.
VAT registered persons can request a different filing period. The approval is up to the decision of Commissioner of Taxation. The Commissioner has the right to request from an individual to file his VAT returns for a previous period.
A taxable person delivering intracommunity supplies of goods and/ or services to taxable persons in other EU Member States has an obligation to register with VIES (VAT Information Exchange System). In addition, there is an obligation to submit monthly electronic VIES forms.
MOSS (Mini One Stop Shop).
The mini One Stop Shop came into force on 1 January 2015 and allows taxable persons supplying telecommunication services, television and radio broadcasting services and electronically supplied services to non-taxable persons in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified.
This scheme is optional, and is a simplification measure following the change to the VAT place of supply rules, in that the supply takes place in the Member State of the customer, and not the Member State of the supplier. This scheme allows these taxable persons to avoid registering in each Member State of consumption. The mini One Stop Shop mirrors the scheme in place until 2015 for supplies of electronically supplied services to non-taxable persons by suppliers not established in the European Union.
VAT in CyprusEach VAT-registered person who supplies goods to or/ and receives goods from other member states (the value of which is exceeding the statistical threshold), is obliged to submit the INTRASTAT return for arrivals as well as dispatches to the VAT Service each month.
According to the EU regulation, the Cyprus government defines each year thresholds expressed in annual values of intra-Community trade, below which parties are exempted from providing any INTRASTAT information. The thresholds are defined separately for arrivals and dispatches and they may change each year. For 2019, the «exemption thresholds» are €180.000 for arrivals and €55.000 for dispatches.
The return must be submitted to the VAT service until the tenth day immediately following the end of the month to which the return relates.
VAT / VIES / Intrastat
Submission of VAT Return and payment of VAT amount due
By the 10th of the second month after the end of the VAT period
Submission of lntrastat form
By the 10th of the month following the end of the reporting month
Submission of VIES form for goods and services
By the 15th of the month following the end of the reporting month
VAT on Immovable Property.
from 1 January 2019
For equal treatment purposes, a long-term lease of immovable property which effectively transfers the right to dispose the property as owner to the lessee may constitute a supply of goods subject to 19% VAT (certain conditions apply).
from 2 January 2018
-The transfer of non-developed building land intended for the construction of structures in the course of carrying out a business activity is subject to 19% VAT.
-In the course of loan restructuring or compulsory transfer of property to the lender, the recipient of the property is liable to account for VAT (reverse charge mechanism).
from 13 November 2017
Leasing of immovable property, except residential dwellings, to taxable persons for taxable business activities is subject to 19% unless a permanent non-imposition of VAT option is exercised by the lesso.