Cyprus
This guide is for e-commerce companies that sell online via web stores or at marketplaces.
Provinces
Goods
Provinces
Goods
Digital services
About
Goods
About
Goods
About
Digital services
About
Digital services
Goods
Digital services
Goods
Digital services
VAT Standard rate
The standard VAT rate in Cyprus in 2024 is 19%.VAT Reduced rate
5%, 9% See the summary of the EU VAT ratesEffective since 1 of January 2015.
According to paragraph 18 of the Thirteen Schedule of the Cypriot VAT Law, digital services provided B2C by foreign companies are subject to Cypriot VAT if the location of the customer is Cyprus.
VAT Standard rate
The standard VAT rate in Cyprus in 2024 is 19%.VAT calculation peculiarity
VAT= Total revenue * 19/119.VAT Reduced rate
In Cyprus, no reduced VAT rates apply with respect to telecommunications, broadcasting, and electronic services provided to non-VAT taxable persons.
VAT Standard rate
19%
VAT Reduced rate
5%, 9%
Thresholds
€10,000
Thresholds
From the 1st of July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of €10,000 for all EU members. In other words, VAT should be charged at the VAT rate of the customer’s country of residence by companies whose annual taxable cross-border turnover is over €10,000.Deductible VAT
To check if you have exceeded the threshold add together the total value of distance sales, you should exclude:- Intra-Community supplies of goods;
- Supplies of new means of transport or of goods that are subject to excise duty;
- Those supplies for which the margin scheme is applicable.
Registration procedure
A person who is to be registered is obliged to notify the Tax Commissioner of his liability by submitting to the local Offices:- Form VAT 105;
- Valid VAT number or certificate of registration as a taxable person (entrepreneur) issued by the Tax Office of the Member State the entrepreneur has established his business in (original);
- Copy of the company statutes;
- Copy of the manager’s passport/ID;
- Copy of the certificate of registration.
Tax representative
If a trader is not resident in the Republic, in the case of private individuals, or a legal person is based abroad, and they carry out business in Cyprus and are liable or entitled to registration in the VAT Register of the Republic, the VAT officer may appoint a person who is resident in the Republic and is recommended by the trader, to act on behalf of the trader for VAT matters (a VAT representative) or require security for the protection of public revenue. It should be noted that, for private individuals resident in another Member State or legal persons incorporated in another Member State, there is no obligation to appoint a VAT representative.VAT payment date
The dates for VAT payment are as follows:- 1st quarterly by the 10th day of the second month following the end of the quarter (quarterly VAT return).
Filing VAT returns
A taxpayer must transmit tax returns to the Cyprus Tax Department by electronic means. The Lovat platform supports digital submission. A tax return must be filed even if no transactions have been performed during the relevant quarter. The dates for filing quarterly VAT returns are as follows:- 1st quarterly – by 10 of April;
- 2nd quarterly – by 10 of July;
- you are not required to file any summarizing annual VAT return in Cyprus.
Threshold
The revenue threshold is €0 for digital services. Cyprus has implemented rules under its domestic legislation whereby taxable persons are released from the payment of the VAT where the amount due is less than €1.70.Pieces of evidence
To identify customer location merchant has to collect at least two items on non-contradictory evidence. And if two of them are in Cyprus, the customer may be determined as Cypriot:- Customer’s permanent address;
- Billing address (bank or electronic payment operator);
- IP address;
- Telephone number;
- The location of the customer’s fixed landline through which the service is supplied to him;
- Other commercially relevant information.
E-services list
A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website, in particular:- E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, «Audio, visual, or audio-visual products»;
- Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall into the audio category;
- Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS);
- Websites, site hosting services, and internet service providers;
- Online ads and affiliate marketing.
Exemptions
- Supplies of lotteries, betting (including horse races or football matches), and other gambling activities are VAT-exempt supplies. For purposes of neutrality, the exemption applies even if these bets are supplied electronically;
- According to the Cypriot VAT legislation, the supply of education by an eligible body (i.e., school, university, or college) is an exempt supply with no right to input VAT deduction. The same provisions apply to E-learning services.
Registration procedure
Registration for the MOSS may be made online. For VAT registration non-resident businesses can apply to the Tax Department (Form T.D.2001) can be submitted either through the PSC Cyprus or by post/hand to the local Tax Department Office. The application should be accompanied by the following documents:- A copy of a certificate of incorporation, a copy of a certificate of registered office address, a copy of a certificate of directors and secretary, and a copy of a certificate of shareholders;
- A copy of a certificate of registration of the business name (in case of business/trade name);
- Questionnaire for the registration of international business entities (registered companies in the Republic of Cyprus whose main business activities are carried out abroad).
Keeping records
In Cyprus, the possibility to issue batches of electronic invoices is available. Cypriot VAT invoices must be issued within six months after you delivered the product or service. Then you need to store these invoices electronically for ten years. Yes, that sounds excessive, but you must keep them on file in case any authority wants to verify your tax history.VAT payment date
A company involved in intra-community transactions must submit VIES declarations to the VAT Office for every calendar month by the fifteenth (15th) day of the month which follows the month for which it relates.Filing VAT returns
EU VAT returns are due quarterly. At the end of each quarter, you have 20 days to file and pay whatever the company owes:- 20 April, for the first quarter ending 31 March;
- 20 July, for the second quarter ending 30 June;
- 20 October, for the third quarter ending 30 September;
- 20 January, for the fourth quarter ending 31 December.
Penalties
If there are mis-declarations or late fillings of Cyprus VAT returns, foreign companies may be subject to penalties:- The penalty for late registration is €85 per late month;
- Late filings are subject to a charge of €51 per return.
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