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Changes to Cyprus tax legislation
2014 has already seen various updates introduced to Cyprus tax legislation come into effect. Taxand Cyprus focuses on VAT and the special levy on gross salaries.
VAT update: increase of rates & related inventory counts
Effective from 13 January 2014, the standard and reduced VAT rates in Cyprus have increased from 18% to 19% and from 8% to 9% respectively. It was mandatory for all taxable persons subject to the aforementioned changes to perform a physical inventory count to include both quantities and valuation upon the close of business 12 January. This final inventory report should be maintained for a period of 6 years. Credit notes issued after 13 January 2014 but relate to invoices which were already raised before that date shall apply the VAT rate which was applicable at the date of supply of goods or services.
Changes to the Special Levy on gross salaries
The Special Levy on gross salaries and pensions of private and public sectors, as well as self employed earnings which was introduced in 2012, will continue to be applicable until 2016. The lower rate of 2.5% will be applicable on amounts starting from EUR 1,500 instead of EUR 2,500 as it was in 2013. More specifically:
- From €0-€15000%
- From €1501-€25002.5%
- From €2501-€35003%
- From €3501- above3.5%
These are effective from 1 January 2014.
Also published in Thomson Reuters' Taxnet Pro, 16 January 2014
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Corporations who have not already performed the physical inventory count for the VAT update should do so immediately and investigate the possibility of a late penalty. Individuals and businesses alike should determine what effect, if any, the changes in the Special Levy may have on their specific situation.