eInvoicing Documentation
eInvoicing in Cyprus
Legislation
The Digital Strategy for Cyprus, approved by the Council of Ministers of Cyprus on 8 February 2012, recommends the adoption of eInvoicing in the context of promoting the use of ICT to enable a smart, sustainable and inclusive economy and society. The Department of Electronic Communications, with the guidance of the Advisory Committee for Information Society, developed the strategy for the period 2012 to 2020. This strategy is in line with the objectives and actions proposed by the Digital Agenda for Europe.
In Cyprus, Directive 2014/55/EU has been transposed via the law of 26 June 2019 on electronic invoicing (eInvoicing) in public procurement. eInvoices in B2G public procurement are used on a voluntary basis by suppliers. Receiving and processing of compliant e-Invoices is mandatory for central public sector bodies from 18 April 2019 on. Sub-central entities are mandated to receive and process compliant eInvoices from 18 April 2020 on.
The Ministry of Finance is the entity responsible for implementing eInvoicing in Cyprus.
Decisions on the mandatory usage of eInvoicing for suppliers to public contracting authorities remain under discussions. SMEs require time for optional use of the system. Cyprus will also likely pursue B2B eInvoicing.
eInvoicing platform and management solutions
Currently, the local regulatory framework is fully harmonised with EU Directive 2014/55/EU and public services and the bodies of the wider public sector (such as local government, public academic institutions, EAC, CYTA and semi-governmental organizations) are connected to Peppol Access Points[1].
Cyprus is expected to develop a centralised eInvoicing platform to process eInvoices. This platform will serve as an Enterprise Resource Planning (ERP) system operated in a hybrid model with the management of the Treasury of the Republic and involvement of AC Goldman Solutions & Services Ltd as the service provider acting on behalf of public sector organisation. The project was co-funded by the Connecting Europe Facility (CEF) programme (more information concerning the project in the ‘Additional information’ section below).
Approach for receiving and processing
Currently, economic operators submit eInvoices to the Treasury of the Republic on a voluntary basis via the eInvoicing Peppol Access Point and through www.gov.cy , the Cyprus Government gateway portal, which replaced the ARIADNE digital services catalogue. The eInvoices are processed manually (i.e. non-automated process). This process will be updated and performed in an automated manner once the centralised ERP System of the Cypriot Government enters into operation.
Regarding the eInvoicing issuance, no explicit requirements exist, while for receiving all contracting authorities are mandated within a B2G context. For B2B transaction and eInvoice exchanges, bilateral agreements between business partners are necessary. while, archiving abroad is allowed, however only within the EU and in countries with mutual administrative assistance in tax matters.
Cyprus postponed the mandatory eInvoicing strategy, since the ERP will not implemented in 2024. In the long-term, the plan is to make eInvoicing mandatory for all public contracts and, in parallel, to intensify the efforts for mandatory B2B and B2C eInvoicing.
eInvoicing implementation in sub-central level contracting authorities
At sub-central level, authorities are mandated to receive and process EN-compliant eInvoices since 18 April 2020. The eInvoicing model in place is a Peppol-based strategy.
The main identified benefits of the implementation of eInvoicing at the sub-central level are cost and operational savings, and the contribution to process automation.
Status on the implementation of the European Standard on eInvoicing (EN)
Cyprus Organisation for Standardisation (CYS) provides access to the European standard on eInvoicing via the CEN website (EN-16931-1 and EN 16931-2).
In order to target the SMEs, a project is co-funded by the Republic of Cyprus and the European Regional Development Fund of the EU in the framework of the Operational Program "Competitiveness and Sustainable Development 2014-2020". The communication is done via seminars and circulars.
Use of Core Invoicing Usage Specifications (CIUS) at national level
There are no CIUS at national level. Cyprus follows the Peppol BIS Billing 3.0 CIUS. Whether the system will be used for tax purposes is still to be assessed.
Digital reporting requirements
In Cyprus, eInvoicing is not currently used for Valued Added Tax (VAT) digital reporting.
Additional information
From 1 October 2016 to 31 December 2017, the Ministry of Finance had participated in a co-financed CEF project and developed a technical infrastructure enabling the exchange of eInvoices in the B2G context. The main objective of this project was to facilitate the adoption of eInvoicing at the national level. This was achieved by adopting European standard, through the connection to the Peppol Access Point and a series of onboarding activities.
[1] (E-Invoicing, ministry of Finance)
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