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Cyprus and VAT


				05.03.2014
						

While government of some countries has a possibility to reduce tax burden for taxpayers, the last spring in Cyprus made some adjustments.

 

Starting from January 13, 2014 the value added tax (VAT) increased as it was planned earlier in 2013. Now the upper rate which is applied to 80% of goods increased from 18% to 19%. As for the lower VAT rate it increased from 8% to 9%. The lower rate is applied to the following:

 

1. Passenger carrying operations and shipment of their luggage within Cyprus;

 

2. Accommodation services (hotel services);

 

3. Public catering services.

 

Increase of value added tax was conditioned upon subscription of trilateral agreement between the International Monetary Fund, the European Central Bank and the European Commission. 

 

Based on: http://www.mof.gov.cy/mof/VAT/VAT.nsf/DMLrates_en/DMLrates_en?OpenDocument

  		

	
		
	
		
Expert’s opinion

	


Cyprus continues its recovery after last years shocks. Almost one year passed since laying off and blocking all accounts. During this year the island continued its working and still does scrambling and rising up. 

 

Unambiguously Cyprus tax system couldn’t remain the same. The corporate tax increased from 10% to 12, 5%. This year the rate of VAT increased.

 

Increase in taxes, even so imperceivable, will lead to increase in the cost of services. But this nuance will not blemish all tax attraction of Cyprus

 

										
Irina Lomakina									     ( Director of Moscow office of “Honest&Bright” Company)
									

	
	
	
					
	
	
	


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