The reduced 5% VAT rate allowed by Cyprus on the first 200 square meters of dwellings used as a principal and permanent residence goes beyond the scope of the option to apply a reduced rate provided by Council Directive 2006/112/EC. The reasoned opinion follows the letter of formal notice sent by the Commission to Cyprus in July 2021. Cyprus now has two months to address the shortcomings identified.
Source: taxathand.com
