Cyprus joined the European Union in 2004 and the Eurozone in 2008, taking on the currency of the Euro.
VAT rates in Cyprus
The standard rate of VAT is 19%, and reduced rates of 5% and 8% are available.
VAT registration in Cyprus
The VAT registration limit for established and non-established businesses is €15,600.
Distance sales have a limit of €35,000 for VAT registration.
The format for a VAT identification number is: 12345678X. Every company must hold a number like this in order for accurate taxation.
VAT returns should be submitted quarterly and annual returns are not required.
Are there any Intrastat thresholds in Cyprus?
Yes. There is a limit of €55,000 for dispatches and €100,000 for arrivals.
VAT recovery in Cyprus
- Is VAT recovery permitted for non-established non-EU businesses?
Yes, but only if the applicant’s country provides reciprocal arrangements for similar repayments to be made to Cypriot businesses.
- Are there any non-VAT recoverable expenses?
Yes, the VAT on most goods and services is non-recoverable.
Reverse charge applies to the majority of cross border services.
Cyprus has implemented an extended reverse charge. This applies to supplies of services by non-established businesses to Cypriot VAT registered customers.
Requirements and regulations in Cyprus
Cypriot tax authorities may demand a tax representative to be appointed for businesses established in a non-EU country, in order for them to register for VAT in Cyprus.
Use and enjoyment rules apply but are limited to telecommunication services and the hire of goods.
The period of VAT recovery by tax authorities has a timescale of 6 or 12 years where there are fraud suspicions.
For VAT deductions and refunds the timescale is 3 years.
Please contact us for further information about paying taxes in Cyprus, and a member of our team will be happy to help you.