Standard rate
The default. If a supply is not on a reduced, zero or exempt list, it is 19%. Professional fees, clothing, cars and electronics sold to consumers all sit here.
Cyprus VAT handbook · 2026 editionp. 01
VAT rates, reverse charge and invoices in Cyprus
Find the right Cyprus VAT rate, check the reverse charge, and make every invoice show what the law requires.
For bookkeepers, finance teams and owners who issue invoices in Cyprus. Look up seventy common supplies, see who accounts for the VAT on a cross-border or construction job, and check an invoice field by field against what the law requires.
19%Standard rate, unchanged by the December 2025 tax reform
9 · 5 · 3The three reduced rates, each tied to a closed list of supplies
30Days from the supply to issue a full VAT invoice
€200Penalty per return for missing the reverse charge, capped at €4,000
Chapter 1 · The rulesp. 02
Chapter one
Every rate, list and invoice rule in one table.
Rates sit in the Fifth and Sixth Schedules of the VAT Law of 2000, and invoice content in the VAT regulations. The December 2025 reform left VAT rates alone, but 2026 brought a new definition of a new building from 1 September and another year of the temporary zero rate.
| Rule | Value | Status |
|---|---|---|
| Standard rate | 19% on every taxable supply not listed for a reduced rate, zero rate or exemption | In law |
| 9% reduced rate | Hotel and holiday accommodation, restaurant and catering services including drinks served, taxi and intercity or tour bus travel, old people's homes | Confirm |
| 5% reduced rate | Foodstuffs, takeaway food without drinks, medicines and vaccines, hairdressing, sports entry, renovation of homes at least three years old | In law |
| 5% on a first residence | First 130 m² of a new home used as the main residence for ten years. Home up to €350,000 and 190 m², deal up to €475,000. Rest at 19% | In law |
| Old 200 m² scheme | Transitional relief for permits applied for by 31 October 2023 ended 15 June 2026, or 31 December 2026 for later permits | Confirm |
| 3% super-reduced rate | Books, newspapers and magazines in print or electronic form, classical theatre, music and dance tickets, waste collection, sewage, aids for disabled people | In law |
| Zero rate | Exports outside the EU, goods shipped to VAT-registered EU businesses, international passenger transport, sea-going vessels and aircraft | In law |
| Temporary zero rate | Baby milk, baby and adult diapers, feminine hygiene products and listed fresh fruit and vegetables, 1 January to 31 December 2026 | Confirm |
| Exempt supplies | Financial services, insurance, medical and hospital care, education, residential leases, land and buildings after first occupation, postal services, betting | In law |
| Domestic reverse charge | Construction services, phones, laptops, tablets, consoles and processors, scrap metal, precious metals and property in debt-for-asset swaps. €200 per return if missed, €4,000 cap | In law |
| Invoice time limit | Within 30 days of the time of supply, unless the Tax Commissioner approves a longer period in writing | In law |
| Simplified invoices | Retail sales need no full invoice unless the customer asks. EU law allows simplified invoices up to €100. The Cyprus limit is not confirmed | Confirm |
| Credit notes | Must refer to the original invoice and show the reduction in net value and VAT. VAT is adjusted in the period the credit note is issued | Confirm |
| Blocked input VAT | Entertainment of anyone other than staff and directors, and the purchase, import or hire of saloon cars, unless the business deals in or hires them out | In law |
| VAT refunds | Interest due if a refund is delayed beyond four months, or eight during an investigation. Claims within six years of the period | In law |
| E-invoicing | No domestic business-to-business mandate in 2026. Under the EU VAT in the Digital Age package, intra-EU sales need structured e-invoices from 1 July 2030 | In law |
In law enacted, in force for 2026, and sources agree
Confirm sources differ or are thin, adviser to sign off
Chapter 2 · Rate finderp. 03
Chapter two
What rate applies to what you sell.
Seventy common supplies, each on its own card with the conditions that decide the rate. Filter by sector or type a word such as coffee, repair or laptop. Cards stamped Confirm are ones where published sources disagree.
Rate finder
Tool 1 of 3Assumptions. Rates are those in force on 14 October 2026: 19% standard, 9%, 5% and 3% reduced, 0% zero rate. The temporary zero rate on listed basic goods runs to 31 December 2026, after which those goods are expected to return to 5% unless the measure is renewed. Reverse charge means the VAT-registered customer accounts for 19% itself. Outside scope means no Cyprus VAT because the place of supply is abroad. Each card is a summary of a longer legal test. Mixed supplies, bundles and special schemes such as the margin scheme for second-hand goods are not covered.
Chapter 3 · Explainedp. 04
Chapter three
Eight terms that decide every invoice.
Most VAT errors in Cyprus are not arithmetic. They come from putting a supply in the wrong box: zero-rated when it is exempt, VAT charged when the customer should reverse charge, or a till receipt where a full invoice was needed.
Reduced rates
Each rate covers a closed list. Hospitality and transport at 9%, food and medicines at 5%, books and waste services at 3%. Nothing qualifies by analogy.
Zero rate against exempt
Both charge the customer nothing. A zero-rated business recovers VAT on its costs. An exempt one cannot, so the VAT it pays becomes a cost.
Reverse charge
The supplier invoices without VAT and the customer declares it instead, usually recovering it in the same return. Used for cross-border services and some domestic trades.
Full invoice
Required for every supply to another business. Dates, sequence number, both parties, VAT numbers, description, net values, rate, VAT in euro and any special wording.
Simplified invoice
A shorter document for low-value retail sales. Never allowed for intra-EU supplies or where the customer reverse charges. Check the Cyprus limit with the adviser.
Credit note
The only proper way to correct or reduce an invoice. It cites the original number and date, and shows the change in net value and in VAT.
Blocked input VAT
VAT on client entertainment and on buying or hiring a saloon car stays with you, even when the spend is entirely for the business.
Explainer one
Zero-rated and exempt look the same on the invoice. They are not the same.
Both a Limassol exporter and a Nicosia insurance broker send invoices with no VAT on them. The difference shows up on the purchase side, in what each can claim back.
Zero-rated: exporter
Spends €50,000 on costs carrying €9,500 of VAT.
Charges 0% on exports and reclaims all €9,500. Often in a repayment position each quarter.
Exempt: insurance broker
Spends the same €50,000 with the same €9,500 of VAT.
Charges no VAT on commission and recovers nothing. The €9,500 is a straight cost.
This is why the label matters. Zero-rated sales count towards the €15,600 registration threshold and open full recovery. Exempt sales do neither. A business with both kinds of income, such as a developer selling new and used buildings, is partially exempt and recovers input VAT only in proportion to its taxable sales, with an annual adjustment.
Explainer two
The domestic reverse charge in construction and electronics.
Cyprus moved VAT on two high-risk trades from the seller to the buyer. Where the customer is VAT-registered and buying for its business, the supplier issues an invoice without VAT and the customer declares it.
- Construction. Building, alteration, demolition, repair and maintenance of buildings and civil engineering works, with or without materials. It runs down the chain: developer, main contractor, every subcontractor. It applies even if the subcontractor is not registered.
- Electronics. Mobile phones and similar network devices, processors before they are built into a product, games consoles, tablets and laptops sold to registered businesses. The invoice must show the customer's VAT number.
- Other goods. Scrap and used metals, unwrought precious metals, and property transferred in debt-for-asset swaps, the last until 31 December 2026.
Sales of the same laptop to a private customer, or building work for a homeowner, still carry VAT in the normal way.
Getting it wrong costs €200 for each return, up to €4,000, on top of any VAT assessed.
Explainer three
Input VAT you cannot recover, however business-like the spend.
Registered businesses recover VAT on costs used for taxable sales. A short list is blocked by law, and it is the first thing a Tax Department inspector looks for in the purchase ledger.
- Entertainment. Client dinners, hospitality and event tickets for customers or suppliers. Entertainment purely for staff and directors stays recoverable.
- Saloon cars. VAT on buying, importing or hiring a saloon car is blocked. The exceptions are car dealers, taxi and rental firms, and driving schools. Vans and lorries are not saloon cars.
- Car running costs. Repairs and fuel for a saloon car may be recoverable to the extent of business use. Sources differ, so agree the treatment before you claim.
- Costs of exempt activity. Anything used for exempt sales, such as residential lettings, and housing costs of directors.
Post blocked VAT straight to the expense account. Claiming it and reversing it later invites a penalty and interest.
Sources: VAT Law 95(I)/2000 and VAT regulations, as summarised by the Big Four and Cyprus firmsp. 04
Chapter 4 · Worked examplesp. 05
Chapter four
Three businesses, worked through.
Each shows the rate decision, the figure that results, and what the business had to change. Figures are illustrative and use the rules in Chapter one.
Four rates through one till in a single quarter
Dine-in meals and drinks are restaurant services. Takeaway food is food. Soft drinks to take away and bottles of wine sold off the shelf are neither.
Dine-in, €38,000 at 9%€3,420.00
Takeaway food, €6,000 at 5%€300.00
Takeaway soft drinks, €1,500 at 19%€285.00
Wine bottles to take home, €2,000 at 19%€380.00
Output VAT for the quarter€4,385.00
Correction needed
The old till charged 9% on everything, declaring €4,275. That under-declares €110 a quarter. Fix: one till key per rate, and confirm the 9% treatment of drinks served at the table.
The old till charged 9% on everything, declaring €4,275. That under-declares €110 a quarter. Fix: one till key per rate, and confirm the 9% treatment of drinks served at the table.
An electrician's €40,000 invoice with no VAT on it
The builder is VAT-registered and buys wiring work for an office block. The subcontractor's invoice says reverse charge and cites the construction provision.
Subcontract value€40,000.00
Output VAT self-declared, 19%€7,600.00
Input VAT reclaimed−€7,600.00
Net cash cost of the VAT€0.00
Reverse charge applied
The developer client is also registered, so the builder's own €250,000 invoice carries no VAT either and the developer declares €47,500. The electrician, charging no VAT but paying it on materials, now claims a refund every quarter.
The developer client is also registered, so the builder's own €250,000 invoice carries no VAT either and the developer declares €47,500. The electrician, charging no VAT but paying it on materials, now claims a refund every quarter.
A 150 m² first home sold for €320,000
Within every limit: under €350,000, under 190 m², and the deal under €475,000. The buyer will live there for ten years. The first 130 m² take 5%, the other 20 m² take 19%.
Price per m², €320,000 / 150€2,133.33
130 m² at 5%€13,866.67
20 m² at 19%€8,106.67
Total VAT, effective 6.87%€21,973.33
Saves the buyer €38,826.67
Against €60,800 at the full 19%. The buyer applies to the Tax Department before completion, and the invoice splits the area by rate. If the home stops being the main residence within ten years, part of the saving is repaid.
Against €60,800 at the full 19%. The buyer applies to the Tax Department before completion, and the invoice splits the area by rate. If the home stops being the main residence within ten years, part of the saving is repaid.
Chapter 5 · Reverse chargep. 06
Chapter five
Who accounts for the VAT on this sale.
Pick where the supplier is, who the customer is, and what is being supplied. The test says who declares the VAT, what the invoice must say, and where it goes in the return.
Reverse charge test
Tool 2 of 3The supplier
The customer
The supply
Who accounts for the VAT
Invoice wording
How to report it
What to do next
Assumptions. Cyprus rates of 19% standard and 5% for renovation of homes at least three years old. Domestic reverse charge applies only where the Cyprus customer is VAT-registered and buys for its business. EU consumer sales use the €10,000 EU-wide threshold for the one-stop-shop, and imports to consumers up to €150 may use the import one-stop-shop. Services follow the general place-of-supply rule; land-related, transport, event and digital services have special rules and are only partly modelled. Return box numbers follow the Cyprus VAT return as described by practitioners and are stamped for adviser confirmation. Registration thresholds of €15,600 for services received and €10,251.61 for EU goods apply to businesses without a VAT number.
Chapter 6 · Invoice checkerp. 07
Chapter six
Would this invoice pass a VAT inspection?
Switch each field on or off to match your own invoice, then set the amount and rate. The sample on the right updates as you go, with each numbered callout matching a switch. Print it as a template when it is stamped checked.
Invoice checker
Tool 3 of 3The invoice
€
days
Fields on the invoice
Net amount
VAT
Total payable
Live sample. Yellow numbers match the switches.
Tax invoice
4Seaview Fit-Out Ltd
22 Makariou Avenue, 6017 Larnaca, Cyprus
22 Makariou Avenue, 6017 Larnaca, Cyprus
3VAT No. CY12345678X
Bill to5Ledra Dental Clinic Ltd
8 Stasinou Street, 1060 Nicosia, Cyprus
8 Stasinou Street, 1060 Nicosia, Cyprus
Customer VAT number6CY87654321Y
| Description | Qty | Unit, ex VAT | Net |
|---|---|---|---|
| 7Reception joinery, supply and fit | 1 | 92,400.00 | 102,400.00 |
Net€2,400.00
11VAT at 19%12€456.00
Total, EUR€2,856.00
13Zero-rated supply: state the legal reason here.
Payment within 30 days to the account shown on the remittance slip. All amounts in euro.
Assumptions. Required fields follow the VAT regulations and the EU VAT Directive. A full invoice needs fields 1 to 5 and 7 to 12, plus 13 when the rate is 0%. A reverse charge or intra-EU invoice needs the customer's VAT number and the reverse charge or exemption wording, and shows no VAT. A simplified invoice needs the date, number, supplier, VAT number, description, rate and total, and is refused above €100 gross, the EU ceiling, because the Cyprus limit is not confirmed. Full invoices are due within 30 days of the supply. VAT is net times rate, rounded to the cent. Field 8 is treated as required whenever the supply date differs from the invoice date.
Chapter 7 · Processp. 08
Chapter seven
Getting rates and invoices right, in four steps.
Most businesses can do the first two in a fortnight. The last two are habits, and they are what an inspector tests.
Week 1
Map every supply to a rate
List what you sell, find each line in the rate finder, and note the condition that decides it, such as dine-in against takeaway or a home's age.
Your price list, till keys and last quarter's sales report.Week 2
Fix the invoice template
Add every required field, your VAT number, the customer's number for business sales abroad, and the reverse charge or exemption wording.
Print the sample in Chapter six as your checklist.Every invoice
Issue within 30 days
Invoice within 30 days of the supply, in an unbroken sequence, with VAT shown in euro. Correct mistakes with a credit note, never by editing the original.
Intra-EU supply invoices by the 15th of the following month.Each quarter
Reconcile and file
Match output VAT per rate to the sales ledger, self-declare reverse charge purchases, strip out blocked input VAT, and file by the 10th of the second month after the quarter.
Keep invoices and records for at least six years.Chapter 8 · Questionsp. 09
Chapter eight
What bookkeepers ask about Cyprus VAT rates and invoices.
Fourteen answers, each short enough to act on. Where a point is not settled, the answer says so. Ask one we missed
01What is the VAT rate in Cyprus in 2026?
The standard rate is 19%. Reduced rates of 9%, 5% and 3% apply to closed lists of goods and services, and some supplies are zero-rated or exempt. The December 2025 tax reform raised corporation tax to 15% but did not change VAT rates.
02Is restaurant food and alcohol taxed at 9% in Cyprus?
Restaurant and catering services are 9%, and current Cyprus guides include drinks served with the meal, alcohol included. The same wine sold as a bottle to take home is 19%, and takeaway food is 5% without its drinks. Ask the adviser to confirm the treatment of alcohol served at the table before you set up the till.
03Which goods are zero-rated in Cyprus until the end of 2026?
Under the decree extending the measure to 31 December 2026: baby milk in liquid or powder form, baby and adult diapers, feminine hygiene products, and a list of fresh or chilled fruit and vegetables such as potatoes, tomatoes, citrus, apples and bananas. Some summaries still list bread, milk and eggs, so check each product code with the adviser.
04What is the difference between zero-rated and exempt for Cyprus VAT?
Neither charges the customer VAT. A zero-rated supply is still taxable, so the seller recovers VAT on its costs and the sale counts towards the registration threshold. An exempt supply gives no recovery, so VAT paid on costs becomes part of the cost.
05When does the reverse charge apply to construction work in Cyprus?
When a VAT-registered business receives building, alteration, demolition, repair or maintenance services for a building or civil engineering work in the course of its business. It applies at every level of subcontracting and even when the supplier is not registered. Work for a private homeowner is invoiced with VAT in the normal way.
06Do I charge VAT when I sell laptops or phones to another Cyprus business?
Not if the buyer is VAT-registered and buying for its business. Mobile phones, laptops, tablets, games consoles and processors fall under the domestic reverse charge. You invoice without VAT, show the buyer's VAT number, and the buyer declares the 19%. Sales to consumers carry VAT as usual.
07How long do I have to issue a VAT invoice in Cyprus?
Thirty days from the time of supply, unless the Tax Commissioner agrees a longer period in writing. Practitioners advise issuing intra-EU supply and reverse charge invoices by the 15th of the month after the supply, to line up with the EU sales statement.
08What must a Cyprus VAT invoice show?
Date of issue, a unique sequential number, the supplier's VAT number, name and address of supplier and customer, the customer's VAT number where it reverse charges, a description and quantity, the date of supply if different, unit price before VAT, net value per rate, the rate, VAT in euro, and any exemption or reverse charge wording.
09Can I issue a simplified invoice in Cyprus, and up to what amount?
Retail sales to the public need no full invoice unless the customer asks for one. EU law lets businesses use simplified invoices up to €100. We have not found a 2026 source that settles the Cyprus figure, and one guide quotes a lower limit, so treat €100 as the ceiling until the adviser confirms. Simplified invoices are never allowed for intra-EU or reverse charge supplies.
10How do I correct a VAT invoice in Cyprus?
Issue a credit note that cites the original invoice number and date, gives the reason, and shows the change in net value and in VAT. Then issue a new invoice if needed. Never edit or delete an issued invoice, because the sequence must stay unbroken.
11Can I reclaim VAT on a company car or client dinners in Cyprus?
Not on buying, importing or hiring a saloon car, unless you deal in cars, hire them out, run taxis or teach driving. Not on entertaining clients or suppliers. VAT on vans, and on entertainment purely for staff and directors, is recoverable in the normal way.
12How long does a Cyprus VAT refund take?
There is no fixed payment date, but interest is due if the refund is delayed beyond four months from the claim, or eight months if the Tax Department investigates it. Refunds are held back while income tax returns are outstanding, and claims must be made within six years.
13Is e-invoicing mandatory in Cyprus?
Not between businesses in 2026. Public bodies have been able to receive structured e-invoices since 2019 and 2020, but sending them is voluntary. Under the EU VAT in the Digital Age package, sales between businesses in different EU countries will need structured e-invoices and near real-time reporting from 1 July 2030.
14Who qualifies for the 5% VAT rate on a first home in Cyprus?
A buyer acquiring or building a home to live in as the main residence for ten years. The 5% applies to the first 130 m² of a home worth up to €350,000 and up to 190 m², in a deal of up to €475,000. The rest of the area is 19%. Above those limits the whole home is 19%.
Free template
Invoice template with the required wording.
- Full invoice layout with all thirteen fields
- Reverse charge wording for construction and electronics
- Intra-EU supply and export wording
- Simplified receipt layout for retail
- Credit note linked to the original invoice
- Tax code map for 19, 9, 5, 3 and 0%
Request the template →
Word and PDF versions, sent by the adviser. Ask for it in the form below.
About the authorsp. 10
Who stands behind this page
Aqualis Ltd, chartered accountants in Nicosia.
Aqualis sets up VAT rates and invoice templates, files quarterly returns and EU sales statements, and represents businesses when the Tax Department queries a rate or an invoice. The adviser named here signs off every figure on this page.
ICPAC memberICAEW memberEnglish and Greek
VAT adviser[name, title]
Office[address], Nicosia, Cyprus
VAT servicesaqualis.com.cy/vat
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