VAT Registration & Filing

VAT is imposed on the provision of goods and services within Cyprus, as well as on the importation of goods into Cyprus. Cyprus first introduced VAT in 1992 and largely based this on the British VAT legislation of 1983 and adjusted accordingly to meet the requirements of the Cypriot economy. This was further amended in 2002 introducing several regulations in order to be in line with the EU VAT directive and also improving administration and procedural framework. Further amendments were made in 2004 due to Cyprus’s inclusion in the EU.

Holding companies fall outside the scope of VAT in Cyprus and any holding company registered in Cyprus engaged exclusively to holding activities in not entitled or obliged to register for VAT purposes.

Trading companies engaged in general trading may register with the VAT authority in Cyprus which when trading within the European Union is mandatory.

Registration is compulsory for businesses which;

Have a taxable turnover from the supply of goods in Cyprus in excess of €15,600 during the twelve preceding months
The expected turnover is in excess of €15,600 from the supply of goods in Cyprus in a period of 30 days following registration
Receives goods in Cyprus from other member states of a total value higher than €10,251.61
Receives services from abroad, either from EU countries or from countries outside the EU in excess of €15,600

Businesses with an annual turnover with less than €15,600 have the option to register voluntarily. There are reduced rates depending on the business activity. There is zero rate on exported goods although if exported to another EU member state they have to meet some requirements.

The VAT aspects of transactions and other transactions involving EU countries are becoming more and more complex. Anyone not familiar with the rules should seek specialized VAT advice and guidance. MegaServe have employees who are expect in the field of VAT.