Effective VAT Rates

Dear Associates,

We would like to provide you with the organized information as to the applicable rates of Value Added Tax in Cyprus. Please see all details in the table below:

Rates

Applies in relation to

0%

 Exports, commission from abroad for imports/exports to/from Cyprus, international air and sea transportation of persons, and goods and related services (except intracommunity transport of goods), ship management services, goods that are to be placed in customs warehouses/ bonded warehouses or free zones and be subjected to the relevant customs regime or temporary importation/ transit or transshipment regime goods that are intended to be incorporated into drilling, supply goods after importation but before customs clearance

5%

 Supplies of animal feeding stuff, including food for birds and fish, supplies of fertilizers, supplies of coffins, supplies of liquefied petroleum gas, newspapers, books, magazines and similar items, supplies of various goods for incapacitated persons, supplies of food including drinks for human consumption but excluding alcoholic beverages (beer, wine) and refreshment drinks, supplies of medicines which are used for medical treatment, illness prevention and medical and veterinary purposes, supplies of vaccines for medicine and veterinary medicine and services supplied by undertakers, services of road cleaning, refuse collection and waste treatment (other than services provided by local administration), services of writers, composers and artists, services of hairdressers, renovation and repair services to private residences (subject to certain conditions), fares for urban and rural areas by bus, catering services from school canteens, purchase or construction of a flat or house to be used as a private main residence

9%

 Restaurant services and other similar catering services which consist in the supply of manufactured or non-manufactured food or drinks or both for human consumption including refreshment drinks, alcoholic beverages (beer and wine), accommodation provided by hotels and other similar establishments, including the provision of holiday accommodation, transportation of passengers and their luggage by taxi

19%

 All supplies of goods or rendering of services, except those taxed at 0%, 5%, 9% and exempt ones

Exemptions:

  • Rents
  • Suppliers of immovable property (except “new buildings”)
  • Insurance and financial services
  • Medical services
  • Educational services

If you are not sure as to which VAT rate is applicable in your particular case, please feel free to contact our lawyers.

NEWSLETTER – Effective VAT Rates

EBA Stress Test Successfully Completed By Cyprus Banks

When European Banking Authority announced the results of its “Stress Test” run on 130 biggest financial institutions of the Eurozone, it became obvious that Cyprus banking sector holds a satisfactory place amongst other jurisdictions. The purpose of the landmark “bank health check” was to reveal whether banks are ready for economic breakdown and have sufficient capital reserves. The stress test outcome displayed a stable and good standing status pertaining to three of four Cyprus banks that completed the stress test. In general, the results demonstrated that capital buffers of such banks as Bank of Cyprus, RCB and Central Co-op are more than sufficient to cover all the capital needs. It is worth mentioning that three banks were enabled to pass the stress test thanks to a wise crisis management and timely recapitalization which significantly strengthened their positions. The only Cypriot bank that did not pass the test due to a small capital shortfall is Hellenic Bank. The management of Hellenic Bank already considered the problem which will be resolved upon the board of directors to decide on supplementary equity issue in the nearest future. It is expected that the deficit is to be made up also by means of conversion of convertible debt securities without a need for additional financial support from the Government of Cyprus.

Such positive results of the stress test serve not only as a confirmation of the very fact that all the measures and efforts directed to reinforcement of banking sector and Cyprus economy in general were correct, targeted and well-weighed but also boost the trust and confidence of depositors and investors in Cypriot banks.

NEWSLETTER – Stress Test Successfully Completed By Cyprus Banks