- VAT is charged on goods and services in Cyprus, as well as on imported goods from the EU.
- Taxable persons charge output tax on their supplies and are charged input tax on goods or services they receive.
- If output tax exceeds input tax, a payment must be made to the state. Immediate refund of excess input VAT can be obtained in certain cases.
- No VAT cash outflow arises on intra-community acquisition of goods, except for excise taxes.
- The legislation provides for four tax rates: zero, reduced at 5% and 9%, and standard at 19%.
- Some goods and services are exempt from VAT.
- VAT is charged on leasing of immovable property when the lessee is a taxable person and is engaged in taxable activities by at least 90%.
- VAT must be charged on the sale of non-developed building land at a rate of 19%. VAT must be accounted under the reverse charge provisions on transactions relating to transfers of immovable property during the process of loan restructuring.
- Leases of immovable property which effectively transfer the risks and rewards of ownership of immovable property are considered supplies of goods and subject to VAT at the standard rate.
- The supply of a building is subject to VAT when supplied before its first delivery and under any subsequent deliveries within a period of five years from its completion.
Source Mondaq
