Insider Business Targeted VAT reduction in Cyprus

Targeted VAT reduction in Cyprus

The further drop in the reduced VAT rate from 9% to 7% for a period of three and a half months, provided that the relevant legislation is approved by the House of Representatives by the end of March, aims to stimulate restaurant and hotel stay consumption, Phileleftheros reports.

Finance Minister Constantinos Petrides has clarified that the temporary measure falls under the general financial support package against the coronavirus impact on businesses. The 9% VAT rate applies to the following sectors:

-Transport of passengers and their luggage within the Republic by urban, intercity and rural taxis as regulated by the Traffic Regulations legislation in force. This also applies for tourist, excursion and intercity buses.

– Restaurant and similar food services, excluding the supply of alcoholic beverages, beer and wine. Also excluded are school canteens.

– Accommodation at hotels, holiday units and similar places.

-Domestic transport of passengers and their luggage by sea.

The standard VAT rate is temporarily reduced from 19% to 17% for a two-month period and this concerns most consumption products such as shoes and electrical appliances as well as services such as telephony.

By Theano Theiopoulou


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