Indirect tax ebook - Cyprus

Cyprus introduced VAT in 1992 by Law 246/90, which is based on the British VAT Legislation of 1983, adjusted to be consistent with the characteristics of the Cypriot economy.

In order to bring the Cyprus VAT Legislation in the line with the EU VAT Directive, VAT Law 95(I)/2000 was introduced along with several Regulations. Via the VAT Law 95(I)/2000 and the Regulations made thereunder, harmonization of the Cypriot VAT system with that of the EU was achieved to a great extend and at the same time the administrative and procedural framework was improved.

The Law and the Regulations made thereunder came into force on the 1st of February 2002.

As form 1st May 2004 the VAT Legislation (Law and Regulations) were amended in order to incorporate the necessary provisions regarding intercommunity transactions (in view of Cyprus accession into the EU) as well as the applicable community acquis in the field of VAT in force as at that date.

VAT is an indirect form of taxation intended to burden consumption expenditure. It is an indirect tax because the trader / taxable person acts as an agent of the VAT Service, collecting VAT from customers / consumers on its behalf and returning the tax to the VAT authorities.

VAT is imposed on supplies and collected at every stage of the production, transportation and distribution of goods and services.

With the recent implementation of the European Union Directives and amendments in the place of supply of services, effective as from 1 January 2010, all European Countries are in great extent harmonized and the tax environment is deemed to become more structured, effective and fairer amongst member Countries.

The above developments require close interaction and collaboration between tax jurisdictions to achieve both the compliance requirements in each Country and also to ensure that you have opted for the most effective structure. Grant Thornton network is able to provide this service due to the people’s experience and expertise in various firms.

The Cyprus indirect tax team can assist national and international clients to structure their activities efficiently and at the same time to be certain that they are fully comply with their obligations.

Due to the Firm’s strong network and the ability to use the expertise of other tax jurisdictions on certain specialised issues we are certain that we can provide you with top quality service.

In particular we provide the following services: 

VAT compliance  

• VAT registration 
• Preparation and filing of VAT returns 
• VAT due diligence and review
• Assistance in tax inspections and appeal procedures

VAT advisory 

• Day to day advice
• Discussion with official bodies concerning the interpretation of tax rules
• Assistance in applying and obtaining official rulings from the VAT authorities
  
  

The Cyprus Indirect Tax team is serving clients who are active mainly in the following business sectors: 

• tourism/hotel, 
• construction,
• services, 
• information technology,
• automotive,
• health, 
• etc.
  
  

The indirect taxes team is headed by/please contact:

George Karavis
Grant Thornton Cyprus
41 - 49 Agiou Nicolaou Street
Nimeli Court, Block C
Egkomi
P.O. Box 23907
1687 Nicosia
Cyprus
T +357 22600000
F +357 22600001
E george.karavis@gtcyprus.com  
W  www.gtcyprus.com  

George is also a member of the Institute of Certified Public Accountants of Cyprus, where he represents the Firm in the VAT Committee of the Institute. 
 

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply