VAT Services

What are the Cyprus VAT rates in 2026?

Cyprus applies one standard rate and three reduced rates. Applying the correct rate to each supply is essential — charging too little leaves you liable for the shortfall, while charging too much can lose you customers and create refund complications.

Rate	Applies to (examples)
19% — standard	Most goods and services not specifically reduced, zero-rated or exempt
9% — reduced	Hotel accommodation and certain hospitality, some passenger transport
5% — reduced	Foodstuffs, pharmaceuticals, books, and the first 130 m² of a primary residence (subject to conditions)
3% — reduced	Specific supplies introduced under recent VAT changes, e.g. certain books, newspapers and accessibility goods
0% — zero-rated	Exports of goods and certain international services (input VAT still recoverable)
Exempt	Certain financial, insurance, medical and rental supplies (no input VAT recovery)

When must you register for VAT?

Registration is compulsory once any of the following applies:

• Your taxable turnover exceeds €15,600 in the previous 12 months, or you expect to exceed it in the next 30 days;
• You make intra-community acquisitions of goods above the relevant threshold;
• You receive services from abroad subject to the reverse charge, or make certain cross-border supplies, regardless of turnover.

Filing VAT returns and paying on time

VAT returns are generally filed quarterly and submitted electronically through the Tax For All (TFA) portal, with payment of any net VAT due by the relevant deadline. The return reports your output VAT (charged on sales) less input VAT (incurred on purchases); you pay the difference, or claim a refund where input exceeds output. Late submission and late payment both attract penalties and interest, which is why VAT is one of the most commonly penalised areas of Cyprus tax.

VAT on cross-border trade: VIES, OSS and reverse charge

Cross-border transactions are where most VAT errors arise. The correct treatment depends on what you supply, to whom, and where they belong:

• VIES — recapitulative statements for intra-community supplies of goods and services to VAT-registered EU businesses.
• OSS (One Stop Shop) — a single return for distance sales of goods and B2C services to consumers across the EU, avoiding multiple registrations.
• Reverse charge — for many cross-border B2B services the customer accounts for the VAT, not the supplier; getting the place-of-supply rules right is critical.

VAT health checks

If you are unsure whether past returns were correct, a VAT health check reviews your treatment before the Tax Department does. Voluntary correction of an error is almost always cheaper than a correction imposed on inspection, where penalties are higher.