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Tax Facts & Figures 2023 – Value Added Tax The Tax System In Cyprus

  • 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

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