Other Taxes - Value Added Tax

Article Insights In December 1990, the Value Added Tax Law was introduced and came into effect on 1 July 1992. Under the law, VAT is levied on all goods produced or imported and all services rendered in Cyprus with certain exemptions. Items which are exempt include:

• Supply and letting of immovable property
• Financial services
• Betting
• Hospital and medical care
• Postal services
• Education
• Insurance
• Certain sporting, cultural and welfare services.

The law provides for two tax rates, 0% and 8%. Zero rated goods and services include, in addition to exported goods:

• Certain services connected with imports, exports and shipping
• Air and sea tickets for travel abroad
• Food and water (with certain exceptions, notably catering)
• Medicines
• Newspapers, periodicals and books
• Bus services, urban and rural
• Gas in cylinders
• Fertilisers and agricultural machinery
• Children's clothing and footwear.

The persons liable to register for VAT are those whose turnover exceeds C£12.000 p.a.

The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be obtained before any action is taken.