Cyprus VAT rates 2026: which rate applies to what

Cyprus charges VAT at five rates. The standard rate is 19%. The reduced rates are 9%, 5% and 3%, and a 0% band covers exports and intra-EU supplies. The rate follows what you sell. Each reduced band is a closed list in the law, and anything the lists don't name carries 19%. If you already know your rate and just need the sums, the VAT calculator works both ways.

What are the VAT rates in Cyprus?

19%, 9%, 5%, 3% and 0%. The standard rate catches every taxable supply that no reduced list names. In a typical services business, it's the only rate that ever appears on a sales invoice.

Which supplies carry the standard rate?

Everything the reduced lists don't name. Consultancy, software, design, agency work, IT services, most retail goods, professional fees and equipment all carry 19%.

Founders often ask us whether a small or first-year company gets a lower rate. It doesn't. The reduced bands are lists of goods and services, and your company's size, age or sector never moves you into one. If what you sell isn't on the lists, you charge 19% from your first invoice.

What is in the 9% band?

Hospitality and passenger transport. Under the VAT Law's 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. That's why apartment owners in Paphos and Limassol meet this rate all the time.

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

Until spring 2026 the 9% band also listed household electricity. Decree KDP 167/2026 removed that entry from 30 April 2026. Household electricity now sits only in the 5% band.

What is in the 5% band?

Food, medicines and other everyday basics. It's the nearest thing Cyprus has to an essentials rate. Under the Fifth Schedule it covers food and non-alcoholic drinks, water, medicines and vaccines, animal feed, fertilisers, LPG, coffins, contraceptive products, household electricity, and buying or building a primary residence, under conditions.

The residence rule needs its own homework. The 5% applies only up to a capped area. It's tied to the property being your main home, and it can be clawed back if your circumstances change within the holding period. The Tax Department applies it to the facts of each purchase. So run the numbers with your developer's tax adviser before you sign. Don't read 5% off a table.

What is in the 3% band?

Books, disability equipment, waste services and a few cultural events. It's the newest and narrowest reduced rate, brought in by Law 75(I)/2023 from 21 July 2023. It covers:

• books, newspapers and magazines, in print or electronic form, where the content isn't 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
• 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 wasn't always true. The performance entry applies 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 taxed at a rate of nothing. 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 the 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. The supply is still taxable, so you keep the right to reclaim the input VAT, the VAT you paid on the costs behind it.

Exempt supplies work the other way. They're broadly financial services, healthcare, education and certain property transactions. No VAT goes on the invoice, and you generally can't recover the input VAT on the related costs. A business with exempt sales absorbs VAT as a real cost instead of passing it on. That changes pricing, cash flow and whether registering helps you at all.

Which everyday goods are temporarily zero-rated in 2026?

Two baskets, each set by decree and 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 often cause confusion, because they were zero-rated in an earlier round of relief. That ended in September 2024. 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 0%. Goods exported outside the EU are zero-rated. Goods sent to a VAT-registered business in another member state are zero-rated too, as long as you hold the customer's valid VAT number and evidence that the goods physically left Cyprus. You then report those intra-EU supplies on your monthly VIES statement. That's the list of your sales to EU businesses, which EU tax authorities use to cross-check each other's records.

Services follow place-of-supply rules instead of a rate list. A service to a VAT-registered business in another member state is usually reverse-charged. Your invoice carries no Cyprus VAT and the customer accounts for the tax at home, but the sale still goes on your VIES statement. Services to private consumers, digital services in particular, can require VAT in the customer's country. That starts once your EU-wide distance sales and digital services to consumers pass €10,000 a year. From then on, the One Stop Shop, or OSS, 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?

Only once you're VAT-registered. Registration is compulsory when your taxable supplies over the past twelve months pass €15,600. It becomes compulsory 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. That pays off when your customers are VAT-registered businesses that recover the tax. It hurts when they're consumers who can't.

Once you're registered, the returns follow. You file quarterly through Tax For All, the Tax Department's online portal. The return and the payment are both due 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?

Line by line, when you write the invoice. Each line carries its own VAT treatment. That treatment decides the rate you charge and the box the amount lands in on the Cyprus VAT return.

The sums are simple once the rate is right. Say you invoice a Cyprus client €2,000 for consultancy. At 19% the VAT is €380, and the customer pays €2,380. Going the other way, €2,380 gross divided by 1.19 gives the €2,000 net. The Cyprus VAT calculator handles every rate on this page, both ways.

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 matches a box on the official return. A reduced-rate line, a zero-rated export, an EU acquisition and a reverse-charge purchase each land where the Tax Department expects them. The quarterly return then builds itself from the books for you to review. Try it on your own invoices. The software starts with a 30-day free trial.

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