- SME Scheme Overview in Cyprus: Small and medium-sized enterprises (SMEs) in Cyprus can opt for the SME scheme, which allows exemptions from certain VAT obligations, facilitating simplified compliance for small businesses.
- Exclusions from the SME Scheme: Certain transactions, such as occasional property transactions and exempt cross-border supplies of new means of transport, are excluded from the SME scheme. Cyprus has a national annual threshold of €15,600, and there are no sectoral annual thresholds applied.
- Simplified VAT Obligations: SMEs under the domestic SME scheme are exempt from various VAT obligations, including the requirement to submit periodic VAT returns, issue invoices, and maintain detailed accounts. However, they can voluntarily register for VAT if needed.
- Cross-Border SME Scheme: For SMEs operating in multiple EU member states, the cross-border SME scheme allows VAT registration requirements to be replaced with a prior notification through the Cyprus SME-SS platform. Only a single quarterly report is required for all member states, simplifying the reporting process.
- Compliance and Appeals: Non-compliance with the SME scheme may lead to the loss of simplified VAT obligations, requiring SMEs to register for VAT and submit periodic returns. Appeals related to the SME scheme must be directed to the relevant Member State of establishment or exemption, depending on the nature of the issue.
Source ec.europa.eu
