VAT in Cyprus – VAT rates in Cyprus in 2026

Cyprus has long remained an attractive destination both for entrepreneurs and for private individuals investing abroad. A stable tax system, clear regulations, and membership in the European Union make settlements predictable and transparent. One of the most frequently discussed topics is VAT in Cyprus — value added tax that applies to most goods and services offered on the island.

If you are wondering what VAT in Cyprus looks like in 2026, which rates apply, and how settlements work in practice, this article provides a complete set of information in simple, clear language.

What is VAT in Cyprus and how does the system work?

VAT in Cyprus operates within the EU VAT framework, meaning its structure is similar to solutions used in other EU countries, including Poland. Tax applies to paid supplies of goods, provision of services, and import of goods into the country.

A VAT taxpayer may be both a self-employed individual and a company. In practice, this means that when you sell goods or services in Cyprus, you add VAT to the net price and then remit it to the Cypriot tax authority.

What is the VAT rate in Cyprus in 2026?

The key information is simple: the standard VAT rate in Cyprus is 19%. This rate covers the vast majority of goods and services available on the market. For many businesses, this value is the reference point when building price lists, calculating margins, and planning costs.

In addition to the standard rate, reduced rates also apply to selected categories of products and services.

VAT rates in Cyprus – the full picture

In 2026, several VAT levels apply in Cyprus:

• 19% standard rate – covers most retail and wholesale sales, electronics, clothing, consulting services, IT services, furnishings, and cars.
• 9% reduced rate – applies to restaurant services, hotel accommodation, and some transport services.
• 5% reduced rate – used for medicines, selected food products, books, newspapers, and electricity for households.
• 3% special rate – applies in narrow, specific cases, mainly for socially or medically sensitive products.
• 0% rate – applies primarily to exports outside the EU and certain intra-Community transactions.

That is why when asking about VAT in Cyprus, it is always worth specifying the type of goods or services involved.

VAT in Cyprus from a consumer perspective

For the final consumer, Cypriot VAT is usually “invisible” because it is included in the gross price shown on the shelf or in an online offer.

When you buy a laptop, furniture, or clothes, you pay a price including 19% VAT. When you stay in a hotel or eat in a restaurant, the price usually includes VAT at 9%. This is worth remembering when comparing prices in Cyprus with other countries — differences often result from taxation levels.

VAT registration in Cyprus

Businesses operating in Cyprus must register for VAT once they exceed a certain turnover threshold. Currently, this threshold is €15,600 per year for domestic sales of goods and services.

Registration is also required when a company trades with other EU countries through intra-Community acquisitions or supplies. After registration, the business receives a VAT number and becomes obligated to submit periodic returns and remit tax.

VAT returns and reporting deadlines

In Cyprus, VAT returns are usually submitted quarterly. They include a summary of sales, purchases, and the amounts of output and input tax.

If output VAT exceeds input VAT, the entrepreneur pays the difference to the tax authority. In the opposite situation, a refund or carry-forward arises. Timeliness is important — delays may result in financial penalties.

VAT in Cyprus and international trade

As an EU member, Cyprus follows common VAT rules. This means:

• supplies of goods to other EU countries may qualify for the 0% rate if formal conditions are met,
• purchases from EU companies often use the reverse-charge mechanism,
• exports outside the EU are taxed at 0%.

For cross-border businesses, this has major implications for structuring sales operations.

What should you remember before starting a business?

Understanding how VAT works in Cyprus helps avoid many costly mistakes. Already at the planning stage, it is worth determining which VAT rate applies to your services or products and whether registration is required. In practice, cooperation with a local accountant greatly simplifies both the start and ongoing compliance.

Key conclusions for entrepreneurs and consumers

In 2026, VAT rates in Cyprus remain stable, and the system is transparent and predictable. The standard rate is 19%, reduced rates are 9% and 5%, and in selected cases 3% or 0% apply.

Thanks to this, it is relatively easy to estimate costs, plan pricing, and compare business profitability with other EU countries. If you know the rules and prepare in advance, handling VAT in Cyprus should not be particularly difficult.