Cyprus VAT Rates 2026

Cyprus VAT Rates at a Glance

What is VAT Called in Cyprus?

In Cyprus, value added tax is officially known as Φόρος Προστιθέμενης Αξίας (ΦΠΑ). It is administered by the Tax Department of Cyprus (Τμήμα Φορολογίας).

Like all EU member states, Cyprus operates VAT under the EU VAT Directive (2006/112/EC), which sets the framework for standard and reduced rates, exemptions, and the reverse charge mechanism across all 27 EU countries. The Tax Department of Cyprus is responsible for VAT registration, returns, enforcement, and issuing VAT rulings.

Reduced VAT Rate in Cyprus (5%)

Cyprus applies a reduced VAT rate of 5% to the following categories of goods and services (subject to the specific conditions of Cyprus VAT law):

• ✓Food and beverages (non-alcoholic)
• ✓Pharmaceutical products
• ✓Books, newspapers and periodicals
• ✓Hotel accommodation
• ✓Passenger transport
• ✓Fertilisers and animal feed

Additionally, Cyprus applies a super-reduced rate of 9% to:

• ✓Restaurant and catering services
• ✓Hairdressing services
• ✓Minor repair services (bicycles, shoes, leather goods, clothing)

Note: Reduced rate eligibility depends on the specific nature of the supply and how goods or services are classified under Cyprus VAT law. Always verify classification with a local VAT adviser before applying a reduced rate.

VAT Registration in Cyprus

Once registered, businesses are issued a Cyprus VAT number (CY + digits). This number must appear on all invoices and be verified on the EU VIES database before zero-rating intra-EU B2B supplies.

Non-EU businesses are generally required to register for Cyprus VAT with no registration threshold — the first taxable supply in Cyprus triggers an immediate registration obligation. Non-established businesses may need to appoint a local fiscal representative depending on the nature and location of their business.

Filing VAT Returns in Cyprus

VAT returns in Cyprus must be submitted electronically via the Tax Department of Cyprus portal. Most member states require payment of VAT due simultaneously with the return submission — check whether Cyprus requires separate payment instructions or if bank debit is automatic.

VAT Invoice Requirements in Cyprus

To be valid for VAT recovery purposes, Cyprus VAT invoices must include the following mandatory information (consistent with Article 226 of the EU VAT Directive, plus any additional national requirements):

1. 1Sequential invoice number
2. 2Date of invoice
3. 3Cypriot VAT number of supplier (CY + 9 digits)
4. 4Full name and address of supplier and customer
5. 5Description of goods or services supplied
6. 6Quantity and unit price (net of VAT)
7. 7VAT rate and amount
8. 8Total amount payable

Simplified invoices (without all fields above) may be issued where the total amount does not exceed €100 excluding VAT, subject to Cyprus's national rules on simplified invoicing.

Reverse Charge Mechanism in Cyprus

Cyprus applies reverse charge to B2B services received from abroad, construction services, and supplies of scrap and waste materials between taxable persons.

Under the reverse charge, the recipient of the supply (rather than the supplier) is responsible for declaring and paying VAT. The recipient self-accounts for VAT on their Cyprus VAT return — declaring both output VAT (as if they had charged it) and input VAT (which they may recover subject to normal rules). The supplier issues an invoice without VAT with a note such as "Reverse charge — Article 196 EU VAT Directive."

EU OSS and Cyprus

Cyprus was an early adopter of the EU OSS scheme; businesses can register via the Tax Department portal to account for all EU B2C digital and goods sales centrally.

Under the EU's One Stop Shop (OSS) scheme introduced in July 2021, businesses selling digital services or goods B2C to customers in Cyprus (and other EU countries) can register in a single EU member state and file a single quarterly return covering all EU consumer sales. OSS avoids the need to register for VAT separately in each of the 27 EU member states where you have customers. The Cyprus VAT due on your OSS return is paid in your registration country and forwarded to Cyprus's Tax Department of Cyprus.

Cyprus VAT: Background & History

Cyprus joined the EU in 2004 and adopted the Euro in 2008. The Cypriot VAT system is administered bilingually in Greek and English, reflecting the island's colonial heritage and international business hub status. Cyprus has one of the EU's lowest VAT registration thresholds at €15,600, designed to bring small businesses into the VAT system early. The country is notable for its large number of international holding companies and financial services firms navigating EU VAT rules.

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