Registration with VAT Authority
A person/company is obliged to register with VAT Authority when:
- At the end of any month, if the value of the taxable supplies (supplies taxed at zero and/or reduced and/or standard rates) exceed €15,600 during the 12 preceding months.
- At any point in time, if there are reasonable grounds for believing that the value of the taxable supplies in the following 30 days then beginning will exceed € 15,600.
- Receives services from abroad (EU and non EU establishments) the value of which exceed € 15,600 during the 12 preceding months.
- Provides services to businesses established in EU member states.
- Purchases goods from businesses established in EU member States (Intra-Community acquisitions) the value of which exceeds €10.251,61.
- Distance selling to consumers in the Republic of Cyprus starting 1st January each year which exceeds the threshold of €35.000
Business with turnover of less than €15.600 can be registered voluntarily if they are involved in taxable activities.
International Business Companies are subject to the same registration rules as companies involved in taxable activities locally. However the activities of most IBCs fall outside the scope of VAT thus there is no obligation for registration. IBC’s have the option of voluntary registration; this enables them to be refunded VAT paid on Cypriot expenses. This does not apply to pure Holding Companies (Polysar case).
The basic rule is that services are taxable in the country where the recipient of the service is established. There are however exceptions to the above rule. These are:
1) Services relating to immovable property
This applies for services related to:
(A) the transfer or assignment of a right to immovable property or the use of any other contractual right exercised on or in relation to immovable property.
(B) any construction work, demolition, alteration, reconstruction, change, extension, repair or maintenance of a building etc,
(C) services provided by real estate agents, auctioneers, architects, experts or inspection companies or individuals whose services are closely linked to issues relating to immovable property.
(D) services relating to hotel accommodation and in sectors of similar character such as holiday camps and sites developed for the use of camping.
2) Admission to cultural, artistic scientific, educational, entertainment and similar services, the organisation of trade and other exhibitions
3) Ancillary services relating to the above
4) Passenger transport
5) Restaurant and catering
6) Restaurant and catering on board a ship/aircraft/train
7) short-term hiring of means of transport (continues use for up to 30 days for motor vehicles and 90 days for vessels).