At CyprusBusiness.com, we support businesses, entrepreneurs and international groups with VAT registration, compliance and structuring solutions in Cyprus.
What is VAT in Cyprus?
VAT is an indirect tax applied to the supply of goods and services in Cyprus, as well as certain imports and intra-EU transactions.
VAT-registered businesses:
- charge VAT on taxable supplies (output VAT)
- recover VAT on qualifying business expenses (input VAT)
Cyprus operates a modern VAT framework aligned with EU VAT Directive rules, supporting both domestic and international business operations.
Cyprus VAT Rates
Cyprus applies several VAT rates depending on the nature of goods and services.
Standard VAT Rate — 19%
The standard VAT rate in Cyprus is 19% and applies to most goods and services.
Reduced VAT Rate — 9%
The 9% rate applies to sectors such as:
- hotels and tourist accommodation
- restaurants and catering
- passenger transport
- certain hospitality-related services
Reduced VAT Rate — 5%
The 5% rate applies to selected categories including:
- food and basic goods
- pharmaceutical products
- books and educational material
- certain medical equipment
- qualifying residential properties under specific conditions
Zero VAT Rate — 0%
The zero rate may apply to:
- exports outside the EU
- intra-EU supplies
- international transport services
- certain qualifying financial activities
Certain services may also be VAT exempt depending on the nature of the activity. The Cyprus VAT system provides flexibility and efficiency for international business operations.