VAT in Cyprus

The value-added tax is an indirect tax in Cyprus that applies to the supply of goods and services and complies with the EU rules and regulations for compliance with this type of tax.

As highlighted below by our Cypriot accountants, there are several categories of VAT or rates that differ according to the types of goods or services provided by the company.

The VAT rates in Cyprus

According to law, the Cypriot VAT rates are as follows:

• standard rate: the standard value-added tax is 19% in Cyprus and it applies to all goods and services that are not included in a special category, as well as transactions with land made for business purposes.
• first reduced rate: in this case, the value of the tax is 9% and it applies to hotel accommodation, restaurants and cafes in Cyprus but not bars, domestic passenger transport by sea as well as by road.
• second reduced rate: this 5% reduced rate applies to most of the foodstuffs and non-alcoholic drinks, packaged medicaments and other pharmaceutical products, medical equipment for the disabled, admission to certain types of events, hairdressing, social housing, and other categories; for a complete list, you can reach out to our Cypriot accountants.
• zero rate: the 0% rate applies to intra-Community and international transport, exports and, until 31 December 2026, certain basic goods (such as bread, milk and baby food); a super-reduced 3% rate applies to books, newspapers and magazines, among others.

VAT compliance in Cyprus

Business owners in Cyprus are required not only to observe the VAT rate for their respective category, according to the types of products or services they offer, but also to make sure that they comply with all of the other VAT reporting requirements.

An important step after the registration of the company is to register for VAT purposes and then submit the VAT returns accordingly (usually on a quarterly basis). The experts at our accounting firm in Cyprus can help you with complete services related to VAT compliance and submission as well as issuing invoices that observe the VAT requirements and maintaining the proper records.

Contact our Cypriot accounting firm for complete information about VAT return forms and deducting the VAT, when possible.