Taxes in Europe Database v2
The Value Added Tax Laws of 2000 to 2011.
The community acquis is suspended in the Territory of the Republic of Cyprus not under the effective control of the government of Cyprus.
The VAT Legislation provides for a special scheme for taxis and special retails schemes.
Special Scheme for urban taxis- Any person who is in possession of no more than two urban taxi licences, may register in the special scheme for taxis instead of accounting for VAT under the normal VAT scheme. Under the special scheme the taxable person does not submit tax returns, and has no right of deduction of input tax. The taxable person pays VAT in two instalments per year, which have been determined according to economic data.
Retail Schemes - Under these schemes the method of calculation of the taxable value and the output tax of supplies of goods or services deviates from the general rules. Additionally, special arrangements are provided concerning the books and records that the retailers must keep. The use of a scheme by retailers is optional.
No special derogations are applied.
Taxable person is every person, naturalor legal, resident in the Republic or abroad, who carries on a business and has registered as such in the VAT Register or is liable to be registered according to the provisions of the VAT legislation.
The term “business” has a very broad sense and means any economic activity carried out in an independent way regardless of the purpose or results of such activity. The term “business” includes any trade, profession or vocation.
In addition the VAT legislation provides that Governmental Authorities, Local Authorities and Public Authorities are not deemed to be taxable persons for the supplies of goods or services made by them in carrying out their mission. There are, however, certain supplies explicitly defined in the legislation, for which the aforementioned persons are considered taxable persons.
VAT is charged:
The basis of assessment is the value of the taxable supply, excluding VAT.
A taxable person may deduct as input tax, the VAT on expenditure which is attributed to the taxable transactions carried out. No right of deduction of tax is allowed if the expenditure involved concerns:
Under the VAT legislation various transactions are exempt from VAT. All exempt transactions are enumerated in the Seventh and Eight Schedule of the Value Added Tax Laws of 2000 to 2012. The main exemptions are:
Cyprus applied the reduced rate of 5%on the supply of liquid petroleum gas (LPG) in Cylinders.
The VAT is due on the tenth day following the month the tax period of the taxable person ends.
Taxable persons are required for each tax period, to pay the difference between output tax (tax on the supplies of goods and services made by the business) and input tax (tax on the purchases of goods and services by the business)