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VAT Increase Anticipated To Bring €140million In Tax Revenue
A new VAT rate at 17% was approved by the Cyprus House of Representatives on December 16 2011. The two point hike in value added tax (VAT) from 15% to 17% is anticipated to produce over 140 million Euros. The new VAT rate of 17% is effective as of March 1 2012. Taxand Cyprus highlights the new regulations this rate increase brings.
Nevertheless, new regulations were also adopted in regards to VAT legislation on 16 January 2012. Accordingly, all Cyprus VAT registered companies, when trading with non-VAT registered companies or individuals, must issue invoices and receipts. This is obligatory according to the new rules, while a receipt is not compulsory when a cash invoice is issued. The penalty for failure to comply with this new regulation is prosecution.
It was also established that it is compulsory for the invoices to include the following details:
- Number of Invoice
- Every good or service must include the percentage of VAT and the VAT amount
- Description of goods or services in question
- Total payable amount (VAT included)
- The method of the payment needs to be defined.
The reduced VAT rates of 5% (applicable on foodstuffs, pharmaceutical products, vaccines for veterinary and medical purposes, newspapers, books, etc.) and 8% (apply to restaurant, transport of passengers, accommodation) will stay the same.
Your Taxand contact for further queries is:
T. +357 22 699 222