Like all Countries taxation Systems, the Value Added Tax (VAT) which is a form of indirect Tax, is also charged in Cyprus. This tax is implied on all selling goods and services which are provided in Cyprus. This VAT is applied with different rated according to the type of goods and/or services provided and you can find all relevant information below. In other case, if you feel the need to contact us for more information you can always contact one of our specialist by phone  or though our contact us.

Obligation to Register for VAT in Cyprus

Companies and Individuals who wants to Register to the Cypriot VAT system is not essential if you are below some specific standards but it becomes mandatory in case your threshold exceeds the €15600, no matter the type of incorporation. VAT registration in required not only for Cyprus companies but for other forms of incorporations such as Limited liability companies, Partnerships, Clubs, Foundations, Unions, International entity and Group of companies.

In general, in order to be sure if you have to be VAT Registered to Cyprus there are three main questions that you have to meet all three in order to have an obligation to be registered:

1. Is your business activity Taxable?
2. Are you buying and selling in Cyprus?
3. Is your income above the registration threshold? (€15600)

Assumingly that you register a company or are individual for purposes which are answered with “Yes” in the 1st 2 questions then in most cases the main questions to have an obligation to register is the threshold of €15600.

Our specialist can assist you in all matters of registrations like trade names, company formation, VAT Registrations and many more.

Cyprus VAT rates

The goods and services that are provided from companies and individuals in Cyprus and are chargeable with VAT are divided into 5 main categories with a different VAT rate each:

• 19% VAT   –   The standard rate of VAT in Cyprus is 19%. All goods and services that don’t fall in any of the other 4 categories are taxed at 19%.

• 9% VAT   –   Hotel accommodation, catering services, and other.

• 5% VAT   –   Books, magazines and newspapers, theatre and cinema tickets, use of sporting facilities, and other.

• 0% VAT   –   Services relating to imports, exports, and other.*

• Exempt from VAT   –   Supplies in the public interest (ambulance, postal services, non-for-profit organisations etc) and insurance, financial and management of mutual funds*

* There is a difference between 0% VAT and “exempted from VAT” and it is that if you sell a product which is in the 0% category, you can claim back VAT on expenses paid to make the product. If the product is exempt from VAT, you cannot reclaim VAT you paid.

Preparation and submission of your VAT 

After the registration, all companies and individuals need to submit a quarterly report (every 3 months). These forms are only available in Greek Language and there is no option for English Language. There is the possibility to reclaim VAT on purchases of goods up to 3 years before registration (unless goods were consumed by registration date) and up to 6 months before registration on purchase of services.

Penalties for late submission and/or Payment of VAT

As with all delays in paying the system, there are also penalties failing to submit or pay your overdue VAT as of below:

• Late registration:   €85 per month of delay
• Late deregistration:   €85 one-off
• Late submission of quarterly return:   €51 per return
• Late payment of VAT:   penalty of 10% x amount due and 4% yearly interest (charged monthly).
• There are similar penalties for late VIES and INSTRAT submissions (relevant only for businesses selling to customers in EU).
• There are significantly more serious penalties (including criminal charges) if the authorities discover tax evasion.

The above is just a brief summary on the main aspects of the VAT system and if needed more in-depth information our specialist team can always assist you. Just contact us and we will do our best to cover all your questions.