On 13 December 2021, the Cyprus Council of Ministers approved the temporary reduction of the applicable VAT rate on electricity supplied to vulnerable consumers as well as for other households. More precisely, vulnerable consumers shall benefit from the temporary reduction of VAT on electricity from 19% to 5%, whereas the corresponding VAT rate for other households shall be reduced to 9%.
- The reduced VAT rate of 5% shall be applicable for a six-month period starting from 1/11/2021 and ending on 30/4/2022 in relation to the supply of electricity which falls under the Domestic Use Tariff Codes 08 and 56.
- The reduced VAT rate of 9% shall be applicable for a three-month period starting from 1/11/2021 and ending on 31/1/2022 in relation to the supply of electricity which falls under the Domestic Use Tariff Codes 01, 02 and 56.
The Decree will come into force after its publication in the Official Government Gazette.
It is further noted that the temporary reduction shall not affect businesses.
How can KPMG assist?
Should you like to further discuss the content and potential impact of the above upcoming changes, please contact one of our trusted advisors from the Indirect Tax Department at KPMG Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.