Key takeaways
- Cyprus VAT rates: The standard VAT rate is 19%, with reduced rates of 9% and 5%, plus a 0% rate for intra-EU and international transport services.
- Registration threshold: Resident businesses must register once turnover exceeds €15,600, while non-EU companies must appoint a fiscal representative.
- Filing & penalties: VAT returns are filed quarterly, and late filings or payments can incur fines of €100 per return and 1.75% interest on overdue VAT.
Cyprus, an island country in the Eastern Mediterranean, is a significant hub for international business, particularly in the finance, shipping, and tourism sectors. Understanding the VAT system is essential for businesses planning to sell there. This guide offers a comprehensive overview of Cyprus VAT regulations.
What is the Cyprus VAT rate?
VAT (Value Added Tax) in Cyprus, known locally as Fóros Prastithémenes Axías (FPA), is a major part of the country's tax system. The standard Cyprus VAT rate is 19%, with reduced rates of 9% and 5%, as well as a 0% rate.
Registering for VAT in Cyprus
Businesses resident in Cyprus with an annual turnover exceeding €15,600 must register for VAT. For foreign businesses, the threshold for Cyprus VAT registration is zero – meaning any taxable supply necessitates registration.
Like the rest of the EU, Cyprus follows the €10,000 threshold for distance selling. Businesses exceeding this in cross-border sales within the EU must register for VAT in Cyprus. They must also register for VAT if they store products in Cyprus, or are signed up to an FBA program (Fulfilled-by-Amazon) that includes Cyprus.
Registration can be done through the Cyprus Tax Department. The process usually takes a few weeks, after which a Cypriot VAT number will be issued. Applications must be made in Greek.
Fiscal representative in Cyprus
Non-EU companies are required to appoint a fiscal representative in Cyprus for VAT purposes. This representative is responsible for ensuring VAT compliance in the country on behalf of the business.
Cyprus VAT return filing and penalties
Cyprus VAT returns must be filed quarterly, although not calendar quarterly. The exact quarterly VAT period will depend on the nature of the business (retailers, industry, or services).
VAT returns and payments are due by the 10th of the month following the reporting period and must be submitted electronically via TAXISnet.
Late filing is subject to a fine of €100 per Cyprus VAT return, while late payments will incur a penalty of 1.75% interest on the amount unpaid.
Cyprus Intrastat declarations
Businesses in Cyprus reaching certain thresholds in intra-community trade must file Intrastat declarations. The thresholds are €270,000 for arrivals and €75,000 for dispatches. Declarations are due by the 10th day of the month following the reporting period. Late filings may result in fines.
Reverse charge in Cyprus
The reverse charge mechanism is applicable to certain goods and services in Cyprus, similar to other EU countries. It shifts VAT responsibility from the supplier to the recipient, who must account for it in their Cyprus VAT return, and is most commonly used for cross-border transactions within the EU.
Frequently asked questions
What is the VAT rate in Cyprus?
The standard Cyprus VAT rate is 19%, with reduced rates of 9% (for hotels, restaurants, and transport) and 5% (for food, books, pharmaceuticals, and cultural events). A 0% rate applies to intra-EU and international transport.
When do I need to register for VAT in Cyprus?
Resident businesses must register once annual turnover exceeds €15,600, while non-resident businesses must register immediately. The EU-wide distance selling threshold of €10,000 also applies.
How do I register for VAT in Cyprus?
Applications are made through the Cyprus Tax Department and must be submitted in Greek. The process usually takes a few weeks, after which you’ll receive your Cypriot VAT number.
Do foreign businesses need a fiscal representative in Cyprus?
Yes. Non-EU companies must appoint a fiscal representative who ensures VAT compliance and shares responsibility for VAT payments in Cyprus.
How often must VAT returns be filed in Cyprus?
VAT returns are filed quarterly, with returns and payments due by the 10th of the month following the reporting period. Filings are submitted electronically via TAXISnet.
Are Intrastat declarations required in Cyprus?
Yes. Intrastat filings are mandatory for businesses exceeding €270,000 for arrivals or €75,000 for dispatches. Returns are due by the 10th of the following month.
