It will be compulsory for all VAT registered companies and individuals to make electronic submission of VAT returns as of 2nd of May 2017. The relevant Legislation was published in the Cyprus Gazette on 16 December 2016. To this extent, all taxable persons need to proceed with registration to the TAXISnet system, the online platform that enables the electronic submission of the VAT returns.
VAT rates in Cyprus
VAT is charged on every supply of goods or services at the standard rate of 19%.
The reduced rate of 5% is imposed on certain goods and services such as hair salon services, repair and maintenance of private households (based on specific conditions), bottled water, juices, pharmaceutical products, entry fees to theatres, cinemas at sports events, luna parks and similar cultural events, the supply of medicines and food (except the supply of food in the course of catering) services of writers, artists, the supply of fertilizers, foodstuff for animal, live animals, seeds, non bottled water, newspapers, books, periodicals as well as some other products and services.
The reduced VAT rate of 9% applies to transport of passengers and their accompanying luggage within Cyprus, with urban, suburban and rural taxis as well as with tour and suburban buses. This rate is also imposed on the services of restaurants and the supply of food in the course of catering as well as on the provision of accommodation in the hotel sector or in sectors with a similar character and the transport of passengers and their accompanying luggage by sea, within Cyprus.
Certain supplies of goods or services are zero-rated such as the supply, hiring and repair of sea-going vessels and aircrafts, the supply of services to meet the direct needs of sea-going vessels, the supply of goods entered into customs regime. In addition, a supply of goods is zero-rated if the VAT Commissioner is satisfied that the goods have been exported or supplied to a registered person in another member state.
No VAT is charged on supplies of goods or services which are exempted under the VAT legislation such as on leasing or letting of immovable property, the supply of immovable property with the exception of buildings or parts of buildings and the land on which they stand if the application for a building permit was submitted after the 1st May, 2004, financial services, lotteries, medical care, social welfare, education, sports, cultural services, insurance transactions etc.