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Cyprus

 

News & Tips

VAT refund [Tip]

If a company is in a repayment position because input tax exceeds output tax, it may opt to submit monthly VAT returns which could improve cash flow.


E-filing [Tip]

VAT return and ESL Statement can be submitted electronically through the TaxisNet system.


VAT returns - Periodicity [Tip]

VAT returns usually cover three months. They are submitted depending on the category [economic activity group] to which each taxpayer belongs. There are three categories: Category A [taxpayers who submit tax returns for the following periods: 1/01-31/03, 1/04-30/06, 1/07-30/09 and 1/10-31/12 of each year], Category B [taxpayers who submit tax returns for the following periods: 1/02-30/04, 1/05-31/07, 1/08-31/10 and 1/11-31/01 of each year] and Category C [taxpayers who submit tax returns for the following periods: 1/03-31/05, 1/06-31/08,1/09-30/11 and 1/12-28/02 or 29/02 of each year].


DOING BUSINESS IN CYPRUS [CY] - VAT GUIDE

 

General

VAT Directive

Cyprus

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

Cypriot VAT numbers have 11 characters [CY + 8 digits + 1 letter].

 

What is the local name of the tax?

 

Foros Prostithemenis Axias [FPA]

 

VAT rate

VAT Directive

Cyprus

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Cyprus applies a standard VAT rate of 19% and two reduced VAT rates: 5% and 9%.

 

See VAT rates applied in the EU.

VAT return

VAT Directive

Cyprus

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Three-month period

Your company  has to report its VAT position by filing a "Tax Declaration" [Form VAT 4] usually on a quarterly basis [standard tax period].

However, monthly reporting period can be allowed or imposed by Cypriot VAT authorities.

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Periodical VAT returns must be filed to Cypriot VAT authorities before the 10th day of the second month [10 of N+2] following the tax period [month/quarter] to which it relates [=> 40 days].

If the VAT return is not submitted on time, Cypriot VAT authorities will impose a levy of € 51.

 

Statement

VAT Directive

Cyprus

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company is not required to file any summarizing annual VAT return in Cyprus.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative Statement [ESL] must be drawn up for each calendar month. ESL should be filed by electronic means to Cypriot VAT authorities by the 15th day of the month after the end of the reporting period [month].

Filing the Statement on a quarterly basis is not possible in Cyprus.

Payment

VAT Directive

Cyprus

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The VAT due should  be paid by the filing deadline for the VAT return [10th day of the month following the end of each tax period - 40 days].

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required in Cyprus.

 

VAT refund

VAT Directive

Cyprus

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member State may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

A VAT credit is in principle automatically carried forward to the next tax period, unless a tax refund has been applied for. VAT credits are refunded quarterly provided the conditions regarding the amount of the VAT credit and the filing date of the VAT return have been met. VAT credit can be refunded monthly through special authorization given by Cypriot VAT authorities.

Special measures for foreign companies

VAT Directive

Cyprus

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

 

No

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider.

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

No

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

 

No

Do special arrangements apply to "call-off-stock"?

 

Yes

Special arrangements apply for call-off-stock.

Foreign taxpayers are therefore not required to be registered in Cyprus provided the conditions are met.

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation regime ABC cannot be applied when the middleman B is also VAT registered in Cyprus [Member State C].

 

VAT on import

VAT Directive

Cyprus

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Yes

Cyprus has introduced VAT warehousing regime.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

No

Postponed accounting via the VAT return is not possible in Cyprus. VAT on import must be paid immediately.  Import VAT needs to be paid to the customs authorities upon importation [immediate payment].

A deferred payment for VAT and customs [similar delay] is however possible under specific conditions.

 

Miscellaneous

VAT Directive

Cyprus

Intrastat Threshold  

Dispatches: € 55.000 [€ 5,800,000]

Arrivals : € 100.000 [€ 1,850,000]

 

Distance Sales - Threshold  

€ 35.000

See various thresholds applied in the EU

 

Ministry of Finance   website

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