The Cypriot government are currently proposing a reduction in VAT on a number of products and services to ease the cost of living.

If approved the legislation will result in the introduction of a new VAT rate of 3%, and a reduction from 5% to 0% on certain products.

Currently most food products are subject to 5% VAT in Cyprus. However, if this legislation is approved, 3% VAT will apply to most food products while some food items are being considered to be placed at 0%.

The government are currently finalising the list of products that will benefit from the reduction in VAT.

If legislation is approved these reduced VAT rates will apply for at least six months, with a possibility for them to be extended depending on the developing cost of living challenges in Cyprus.

If you have any questions on the impact of the above changes on your business, please contact us here