Cyprus VAT rates 2026: which rate applies to what

Cyprus charges VAT at five rates: a standard rate of 19%, reduced rates of 9%, 5% and 3%, and a 0% band for exports and intra-EU supplies. The rate follows the supply itself: each reduced band is a closed statutory list, and anything the lists do not name carries 19%. If you already know your rate and just need the arithmetic, the VAT calculator works in both directions.

What are the VAT rates in Cyprus?

Cyprus has five bands, one of which is nil. The standard rate catches every taxable supply that no reduced list captures, and in a typical services business it is the only rate that ever appears on a sales invoice.

Which supplies carry the standard rate?

The standard rate covers everything the reduced lists do not name. Consultancy, software, design, agency work, IT services, most retail goods, professional fees and equipment all carry 19%.

Founders regularly ask us whether a small or first-year company qualifies for a lower rate. It does not. The reduced bands are lists of goods and services, and the size, age or sector of your company never moves you into one. If your supply is off the lists, you charge 19% from your very first invoice.

What is in the 9% band?

The 9% band is hospitality and passenger transport. Under the Twelfth Schedule it covers hotel and holiday accommodation, restaurant and catering services, domestic taxi and tourist or intercity bus transport, domestic sea passenger transport, and old-age homes. Short-term holiday rentals let as accommodation sit here too, which is why apartment owners in Paphos and Limassol meet this rate constantly.

Mixed guest bills need line-by-line care. A bill that combines the room, a restaurant meal and a separately charged excursion is several supplies, and the lines can sit in different bands. The accommodation follows 9%, while cleaning or laundry billed as its own supply may not.

Until spring 2026 the 9% band also listed household electricity. Decree KDP 167/2026 removed that entry with effect from 30 April 2026, and household electricity now sits solely in the 5% band.

What is in the 5% band?

The 5% band is the closest thing Cyprus has to an essentials rate. Under the Fifth Schedule it covers foodstuffs and non-alcoholic beverages, water, medicines and vaccines, animal feed, fertilisers, LPG, coffins, contraceptive products, household electricity, and the acquisition or construction of a primary residence under conditions.

The residence rule deserves its own homework. The 5% applies only up to a capped area, it is tied to the property being your main home, and it comes with clawback conditions if your circumstances change within the holding period. The Tax Department applies it to the specific facts of each purchase, so run the numbers with your developer's tax adviser before you sign, rather than reading 5% off a table.

What is in the 3% band?

The 3% band is the newest and narrowest reduced rate, introduced by Law 75(I)/2023 with effect from 21 July 2023. It covers books, newspapers and magazines in print or electronic form where the content is not mainly advertising or video and music; audiobooks for people with disabilities; wheelchairs, lifting devices and orthopaedic items, prostheses and hearing aids; street cleaning, refuse collection and waste treatment; sewage disposal and septic tank emptying; and admission to first performances of theatrical, musical, dance or classical works.

An e-book and its printed edition now sit in the same band, which was not always true. The performance entry attaches only to first performances, so an ordinary ticketed event stays at 19%.

What is zero-rated, and how is it different from exempt?

Zero-rated means taxable at a rate of nothing, while exempt means outside the tax altogether. The customer sees the same invoice either way, with no VAT on it, but the effect on your business is opposite.

Zero rating under art. 25 applies to exports of goods outside the EU, intra-EU supplies of goods to VAT-registered customers, and international transport. Because the supply is still taxable, you keep the right to reclaim the input VAT on the costs behind it.

Exempt supplies, broadly financial services, healthcare, education and certain real-estate transactions, work the other way. No VAT goes on the invoice, and the input VAT on the related costs generally cannot be recovered. A business with exempt output absorbs VAT as a real cost instead of passing it through, which changes pricing, cash flow and whether registering helps you at all.

Which everyday goods are temporarily zero-rated in 2026?

Two decree-based baskets run during 2026, each with a hard end date. Under KDP 337/2025, baby milk, babies' and adults' nappies, women's hygiene products, and fresh vegetables, potatoes and fruits are zero-rated from 1 January to 31 December 2026. Under KDP 168/2026, fresh, chilled and frozen meat, poultry, rabbit, edible offal, fish, and cuttlefish, squid and octopus are zero-rated only from 6 April to 30 September 2026.

Coffee and sugar are a common source of confusion because they were zero-rated in an earlier round of relief. That ended in September 2024, and both have been back at 5% since 1 October 2024.

Which rate applies to EU and non-EU customers?

For goods, cross-border usually means zero rating. Goods exported outside the EU are zero-rated, and goods sent to a VAT-registered business in another member state are zero-rated too, provided you hold the customer's valid VAT number and evidence that the goods physically left Cyprus. Those intra-EU supplies then get reported on your monthly VIES statement.

Services follow place-of-supply rules instead of a rate list. A service to a VAT-registered business in another member state is typically reverse-charged: your invoice carries no Cyprus VAT and the customer accounts for the tax at home, but the sale still belongs on your VIES statement. Services to private consumers, and digital services in particular, can require VAT in the customer's country once your EU-wide B2C distance sales and digital services pass €10,000 a year, at which point the One Stop Shop lets you declare it all through one registration. Our guide to VIES submissions covers the reporting side, and how VAT works for Cyprus freelancers walks through the day-to-day mechanics.

When do you have to charge VAT at all?

You only charge VAT once you are VAT-registered. Registration is compulsory when your taxable supplies over the preceding twelve months pass €15,600, or earlier, from the moment you reasonably expect to cross that figure within the next 30 days. The threshold survived the EU small-enterprise VAT scheme that Cyprus adopted in 2025, so €15,600 is still the number for 2026. Below it you can register voluntarily, which pays off when your customers are VAT-registered businesses that recover the tax and hurts when they are consumers who cannot.

Once registered, the returns follow: quarterly filings through Tax For All, due with payment by the 10th day of the second month after the quarter ends. A quarter ending 30 June is due by 10 August.

How do you put the right rate on an invoice?

You set the rate line by line, at the moment you write the invoice. Each line carries its own VAT treatment, and that treatment decides both the rate charged and the box the amount lands in on the Cyprus VAT return.

The arithmetic itself is simple once the rate is right. Say you invoice €2,000 of consultancy to a Cyprus client: at 19% the VAT is €380 and the customer pays €2,380. Going the other way, a €2,380 gross figure divided by 1.19 gives the €2,000 net. The Cyprus VAT calculator handles every rate on this page in both directions.

The box mapping is the part worth automating. Generic international tools treat Cyprus as a rate dropdown, which gets the percentages right and the return wrong. In Sumly, every Cyprus VAT code corresponds to a box on the official return, so a reduced-rate line, a zero-rated export, an EU acquisition and a reverse-charge purchase each land where the Tax Department expects them, and the quarterly return assembles itself from the books for you to review. Try it on your own invoices with the 30-day free trial, no card needed.

Questions founders actually ask

Frequently asked

Which VAT rate should I charge my Cyprus business customers?

Almost always 19%. The reduced rates attach to specific goods and services, such as accommodation, food and books. They do not depend on who the buyer is. If what you sell does not appear on one of the reduced lists, you charge 19% whether the customer is a company, a sole trader or a private individual.

Is zero-rated the same as exempt?

No, and the difference costs real money. A zero-rated supply is taxable at 0%: you charge no VAT and keep the right to reclaim the VAT on your own costs. An exempt supply sits outside the VAT system: you charge no VAT and generally cannot reclaim the input VAT behind it. The invoice looks the same to the customer, but your cash position is very different.

Do I charge Cyprus VAT to a customer in another EU country?

For goods sold to a VAT-registered business in another member state, generally no. The supply is zero-rated, provided you hold the customer's valid VAT number and proof the goods left Cyprus, and you report it on your monthly VIES statement. Services to EU businesses are usually reverse-charged, so the customer accounts for the VAT in their own country. Sales to private consumers follow different rules and can require VAT in the customer's country once your EU-wide distance sales and digital services pass €10,000 a year.

Which VAT rate applies to a short-term holiday rental in Cyprus?

9%, the same band as hotels. Holiday accommodation let as accommodation sits in the 9% band together with restaurant and catering services and domestic passenger transport. Extras billed as separate supplies, cleaning or laundry for example, can carry a different rate, so check each invoice line rather than applying 9% to the whole bill.

Did the Cyprus VAT rates change for 2026?

The five bands are unchanged: 19%, 9%, 5%, 3% and 0%. The 2026 tax reform rewrote corporate and personal taxation and left the VAT rates alone. What did move in 2026 is the temporary zero-rating: baby milk, nappies, women's hygiene products and fresh fruit and vegetables are zero-rated until 31 December 2026, and fresh meat and fish were zero-rated only from 6 April to 30 September 2026. Household electricity also lost its 9% entry in April 2026, but it remains at 5%.

How do I work out the VAT inside a price that already includes it?

Divide, do not multiply. A gross price already contains the VAT, so you extract it: divide by 1.19 for the 19% rate, by 1.09 for 9%, and by 1.05 for 5%. A €238 gross invoice at 19% is €200 net plus €38 VAT. The Sumly VAT calculator does the arithmetic in both directions for every Cyprus rate.