VAT related Services

Value Added Tax (VAT) is an indirect tax levied on the provision of goods and services in Cyprus as well as on the acquisition of goods from the European Union and the importation of goods into Cyprus.

With respect to purchases from other member states of the European Union, the Cyprus Company do not pay VAT on the importation of goods into Cyprus but instead accounts for VAT using the reverse charge method.

Under the reverse charge method, the company performs a simple book entry in its books by self-charging VAT and at the same time claiming it back, resulting thus in no cost to the company.If however,the purchase relates to a transaction with no right to recover the input VAT,then the Cyprus company must pay the VAT ,that corresponds to that transaction.

Registration is compulsory if:

  • Turnover is in excess of €15.600 (fifteen thousand six hundred euros) during the 12 preceding months, or
  • Acquisitions of goods in Cyprus, from member states in excess of €10.251,61 (ten thousand two hundred fifty one euros and 61 cents), or
  • As from 1/1/2010,an obligation for VAT registration exists,for businesses engaged in the supply of intra-community services ,for which the recipient accounts for VAT ,under the reverse charge mechanism (no registration threshold exists in this case)
  • Moreover,Businesses carrying out economic activities from the receiptb of services from abroad for which exists an obligation to account for Cyprus VAT under the reverse charge mechanism,are oblidged to register to VAT,subject to the registration threshold of 15.600 ,per any consecutive 12 month period.
  • If it is expected that in the next 30 days the above thresholds will be exceeded

VAT rates

The local V.A.T rates range from 0 % to 19 % according to the category of the good and service offered.

Exemptions

An example of the goods and services that are exempt from VAT are:

  • Rent
  • Medical services
  • Insurance services
  • Management services provided to mutual funds
VAT declaration

The VAT returns must be submitted quarterly and the payment of the VAT due, if any, must be effected within 40 days from the end of each respective quarter.

Services that we offer:

  • Maintaining VAT records
  • Submitting the quarterly VAT returns to the V.A.T authorities
  • VAT planning and advice
  • Assistance in investigations made by the VAT authorities
  • Assistance in the situation of additional taxes claimed and penalties imposed by the VAT authorities
  • Liaising with the VAT authorities
Penalties
Late submission of a VAT return €51 per return
Late submission of a VIES return €50 per return
Late submission of a corrective VIES return €15 for each return
Late registration with the VAT authorities €85 per month of delay
Omission to maintain books & records for a period of 6 years €341