Cyprus Vat Registration: In Cyprus a company has to register with the Vat Authority if it will do a turnover of 15600 Euro or more. Getting a Cyprus Vat Registration number requires the following. You must be tax resident and a trading person either physical or legal, who carries out any kind of trading activity either in Cyprus or abroad. A Cyprus vat registration number must be obtained whether vat tax will be payable by you or not. Vat tax chargeable on any supply of goods or services is a liability of the person making the supply. A taxable person natural or legal, resident in the Republic or abroad who carries on a business in the Republic must be registered with the Vat in Cyprus. A vat number is not difficult to get. Our firm will get it in 3 days. What we need is the company incorporation certificates and to file in the vat application which is submitted to the vat authority. The vat number is issued in 2 to 3 days after the Cyprus Vat Registration application.
The term “business” for vat purposes, has a very broad sense and means any economic activity carried out in an independent way regardless of the purpose or results of such activity. The term “business” includes any trade, profession or vocation. Employees or other natural persons who are bound to any employer by a contract of employment or by other legal relation, which creates relationship of employer and employee, are not considered to be carrying out an economic activity and therefore they are not considered as taxable persons. In addition the legislation provides that Governmental authorities, local authorities and public authorities are not deemed to be taxable persons for the supplies of goods or services made by them in carrying out their mission.
There are, however, certain supplies explicitly defined in the legislation, for which the aforementioned persons are considered taxable persons. The supplies of goods or services made by a person who is not considered as taxable, are not vat chargeable. On the other hand when this person buys goods or services, he is charged with vat as if he was the final consumer. For more information on how to register with the Vat authority and you need to contact us for advice or other information follow this link: Contact Us Here.
Cyprus Vat Registration: Cyprus Vat Rates
The Cyprus Vat Rates are very favorable to foreign businessmen compared to vat tax rates in other countries. They are only 19% as from 13 January 2014. Vat is charged on all imports into Cyprus of goods or services. That is on every supply of goods imported into the country or services given within the Republic, by a taxable person, in the course or furtherance of any business carried on by him, other than a supply exempted in accordance with the provisions of the law. Vat tax 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 this tax from customers / consumers on its behalf and returning it to them.
Vat in Cyprus is imposed on supplies and collected at every stage of the production, transportation and distribution of goods and services. In this respect every company trading in Cyprus or the EU must secure a vat registration number, so that all its sales are monitored by the EU vies system. For more reading about Cyprus Vat, the rates, the goods and services which are taxable and the other Cyprus taxes follow this link: Vat Rates in Cyprus – Cyprus Taxes.
Goods and Services On Which Vat Tax is Levied
Cyprus Vat is charged on every taxable supply of goods or services, that is on every supply of goods or services made within the Republic, by a taxable person in the course or furtherance of any business carried on by him. As a general rule a supply of goods or services is charged if made for consideration. Nevertheless, the law provides that specific supplies are considered to be taxable even if made for no consideration. The supply of any goods is treated as made in the Republic if the goods are in the Republic. The supply of any services is treated as made in the Republic if the person supplying them is in the Republic. As an exception, the legislation provides that the supply of certain services should be treated as taxable even if made by a person who is in another country and received by a person who registered in the Republic.
When Is Vat Tax Chargeable
Cyprus Vat Registration: The supply of any goods is treated as made in the Republic if the goods are physically in the Republic. The supply of any services is treated as made in the Republic if the person supplying them is in the Republic and therefore Cyprus Vat is chargeable. The Vat Rates in Cyprus are lower than in many other EU countries standing at 19%. As an exception to the above, the law provides that the supply of certain services should be treated as taxable even if made by a person who is in another country and received by a registered person who is in the Republic.
A supply of goods is treated as taking place at the time of the removal of the goods or at the time when the goods are made available to the person to whom they are supplied. A supply of services is treated as taking place at the time when the services are performed. As an exception to the above, if an invoice is issued or a payment is received before or an invoice is issued within 14 days after the removal of the goods and the performance of services, the supply of goods or services is treated as taking place at the time the invoice is issued or the payment is received.
Tax is Levied On Most Goods and Services
Cyprus Vat Registration: The standard vat rates in Cyprus is 19% as of the 13th of January 2014. Cyprus Vat is charged on every supply of goods or services at the standard rate of nineteen per cent (19%). Reduced rates of 5% on certain commodities and services.
The reduced rate of 5% is imposed on the supply of coffins, services supplied by undertakers, services of writers, artists, on the supply of fertilizers, foodstuff for animal, live animals, seeds, non bottled water, newspapers, books, periodicals, certain products for persons with special need, ice cream, certain types of nuts (salted etc), transport of passengers and their accompanying luggage with urban and rural buses, the letting of camping sites and caravan parks, hair salon services, confectionery product, foods ,bottled water, Juices, medicines, pharmaceutical products, entry fees to theaters, cinemas at sports events, lunaparks and similar cultural events.
Cyprus Vat Registration: Reduced Vat Rates
The following services are taxable at the reduced vat rates of 8%: transport of passengers and their accompanying luggage within Cyprus, with urban, suburban and rural taxis as well as with tour and suburban buses. Services of restaurants and the supply of food in the course of catering. Provision of accommodation in the hotel sector or in sectors with a similar character. The transport of passengers and their accompanying luggage by sea, within the country is taxable at the Cyprus Vat Rates of 8%.
Cyprus Vat Registration: Zero Vat
Certain supplies of goods or services are zero-rated; the supply, hiring and repair of sea-going vessels and aircraft, the supply of services to meet the direct needs of sea-going vessels. In addition, a supply of goods is zero-rated if the vat commissioner is satisfied that the goods have been exported or supplied to a registered person in another member state.
No Cyprus Vat is charged on supplies of goods or services which are exempted under the law; leasing or letting of immovable property, the supply of immovable property with the exception of buildings or parts of buildings and the land on which they stand if the application for a building permit was submitted after the 1st May, 2004, financial services, lotteries, medical care, social welfare, education, sports, cultural services, insurance Transactions etc.
Imported Goods or Services
Vat is charged on all imported goods regardless of the importer being a taxable person or not. In the importation of goods of goods. Vat is considered to be an imports duty and is charged as if it were a duty of customs. Customs enactments are applied on imported goods with such exceptions or adaptations as regulated by the law. In certain cases, the importation of services, that is the supply of services from abroad to the Republic, is treated as a taxable supply of services made by the recipient, if he is a taxable person.
Vat Returns Must Be Filed Quarterly
Every taxable person is liable to submit Tax Declarations and pay the vat tax that may be due, usually every three months. Cyprus vat declarations relate to certain tax periods that are made known to the taxable person at the stage of his registration. On the declarations, taxable persons calculate their output tax (the tax on supplies of goods or services they made during the relevant tax period and the vat calculated on the acquisition of goods from other member States.
Vat Representative For Foreign Entities
If a trader is not resident in the Republic – in the case of a natural person or the legal person is based abroad – carries out a business in Cyprus and is liable or entitled to registration in the VAT Register of the Republic, tax officer may appoint a person who is resident in the Republic and is recommended by the trader, to act on behalf of the trader for Cyprus vat matters (a VAT representative) or require security for the protection of public revenue. It should be noted that for persons resident in another member state or legal persons incorporated in another member state, there is no obligation to appoint a vat representative. For more reading about your tax planning please follow this link: CyprusTax Rates.
Zero Rating For Intra Community Supplies
Prior to 1st May 2004 (accession of Cyprus in the EU) all exports of goods to destinations outside Cyprus, qualified for the zero rate of VAT. This continues to be the case for exports to countries outside the EU. However, under the EU VAT arrangements, as from that date a Cypriot trader registered for VAT may zero-rate the supply of goods to a customer in another Member State (MS) provided that:
- The customer is registered for VAT in the other MS.
- The customer’s VAT registration number is obtained and retained in the supplier’s records.
- This number, together with the supplier’s VAT registration number is quoted on the sales invoice.
- The goods are dispatched and transported to the other MS.
- The supplier retains appropriate commercial documentary evidence that the goods have been removed from Cyprus.
- The supplier submits the Recapitulative Statements to the VAT Service.
- The European VIES System.
VIES (Vat Information Exchange System) contributes to the effectiveness of this new Vat regime and provides a mechanism for preventing and deterring of the abuse of the Vat zero-rating provisions on Intra-Community trade of goods and detecting unreported movements of zero-rated goods between MS. An integral part of the system is a requirement that each MS must store and process specific information which it collects from its traders about their supplies to other MS.
Obligation Of Traders Under Vies
Under the EU and the national legislation regulating VIES, any Vat-registered person who supplies goods to a Vat-registered person in another MS has to submit the Recapitulation Statement declaring all the Intra-Community supplies made during a calendar quarter. The Statement must be submitted to the Vat Service until the 15th day of month following the month to which the statement relates. Purpose of the Intrastat system. In January 1993, frontier controls on the movement of goods between EU member states were abolished and importers and exporters in EU trade no longer were required to complete customs documentation.
Therefore, in order to fill the gap that was created concerning the collection of statistics information, the EU introduced a system known as Intrastat. The system was designed to ensure that statistics of internal EU trade could be collected in a way which would maintain the quality of the statistics and the timeliness of their collection. The system places obligation on traders to submit periodic declarations of their trade. The INTRASTAT returns are submitted to the VAT Service each month and concern arrivals from, as well as dispatches to other member states.
Obligations of Traders Under Intrastat
As from May 1st 2004, each Vat-registered person who supplies goods to or/ and receives goods from other member states (the value of which is exceeding the statistical threshold), is obliged to submit the Intrastat return for arrivals as well as dispatches to the VAT Service each month. The return must be submitted to the Vat service until the tenth day immediately following the end of the month to which the return relates.