Cyprus VAT rules

Registration process

OSS/IOSS registration process for taxable persons

Registration to One Stop Shop can be made electronically via the Cyprus Tax Administration's OSS Portal:

https://tax-oss.mof.gov.cy/login

New taxable persons that want to use the OSS scheme must first create their account by clicking the option "Don't have an account? Sign Up" and follow the Instructions from there. Then, they will need to click the verification link on their designated e-mail and login to their account to finish the registration process.

IOSS registration process for intermediaries 

Intermediaries can also use the same process as above to register.

A further condition for the registration of an intermediary is that the prospective intermediary has not significantly failed to comply – and is not expected to fail to comply – with their tax-related obligations.

Appointment of a tax representative for registration within the Union OSS for a company not Established in the community

Only required for the cases where the trader supplies goods and is established in a country or jurisdiction with which Cyprus has not signed a mutual assistance agreement.

Refusal of registration

• Taxable persons who had their registration request rejected, can file  a written claim for adjustment by e-mail on: ecommtax [dot] mof [dot] gov [dot] cy (ecomm[at]tax[dot]mof[dot]gov[dot]cy).
• In case the taxpayer still believes that he shouldn't be rejected, he may file an appeal to the Commisioner of Taxation within 60 days from the day he is made aware of the refusal of the registration
• The trader can also file an appeal to the  Administrative Court within 75 days from the day he is made aware of the refusal of the registration

Invoicing

Invoicing
Cyprus requires an invoice in the following cases:
•    Distance sales of imported goods, by a taxable person established or not established in the EU, under the IOSS. The invoicing rules will apply when Finland is the Member State of identification of the supplier.
•    Distance sales of imported goods, by an electronic interface, acting as deemed supplier (Article 14 a(1) of the VAT Directive), under the IOSS. The invoicing rules will apply when Finland is the of the Member State of identification (of the electronic interface).
•    Instructions on which information is required on an invoice can be found at:.............................

Or 

Describe the invoicing obligations provided for by the national legislation applicable under the OSS/IOSS schemes.

Invoicing comments

This subsection can be used to provide further details regarding the invoicing obligations and the required formalities within the framework of the OSS/IOSS schemes (e.g., obligation to issue electronic invoices).

VAT returns

Formalities in the submission of the VAT return

Filing One Stop Shop VAT returns can be made electronically via the Cyprus Tax Administration's OSS Portal.  Instructions regarding how to file can be found via this link:https://www.mof.gov.cy/mof/TAX/taxdep.nsf/All/C8213EB76B9E4ECBC2258AC1003CE921/$file/OSS%20VAT%20Return%20Guide.pdf?OpenElement

Corrections to returns after the three-year period

General approach to corrections beyond the standard period

When Cyprus is the Member State of consumption, a taxable person is allowed to provide a corrective return within three years from the due date of the return being corrected by filling the corrections section in the OSS system of the member state where he is identified.

After the Member State of identification no longer accepts corrections to earlier filings, a taxable person must submit a formal request to the Commisioner of Cyprus Taxation in written form either by e-mail or by post.
E-mail address:ecommtax [dot] mof [dot] gov [dot] cy (ecomm[at]tax[dot]mof[dot]gov[dot]cy)
Postal address:Michael Karaoli & Gregori Afxentiou, 1439, Nicosia, Cyprus.

The corrections are handled by the Finnish Tax Administration.

Reference to the above may be found in General Regulations 24&25 of 314/01 of the VAT Law as Ammended. 

Payment modalities and deadlines

Payment modalities in Member State of identification (MSID)

One Stop Shop VAT payments can be made via bank transfer (information on what information is needed to be filled is sent to the designated e-mail of the taxable person and through an in-system notification, as soon as the VAT Return is submitted, processed and sent to the member states of consumption. The reference number is customer and period specific.

Additional payment-related procedures in the Member State of consumption (MSCON)

Late Payment penalties will be imposed if payment was initiated after the due date.
The penalties consists of 10% Additional VAT on the amount due which is capitalised and then interest charge charged on a monthly basis based on every completed month where the payment has not been made.

Applicable payment deadline

VAT Payment must arrive at the Tax Administration by the end date of the month that follows the tax period’s end date. The deadlines do not move forward if the scheduled due date falls on a Saturday, Sunday or a public holiday.

Taxable persons are encouraged to initiate the payment couple days in advance and notice bank holidays and processing times. Payment is considered on time when the payment is Received by Cyprus Tax Authority and the value date of the transaction is on, or before, the due date.

Payment Facilitation and Support for Arrears

If a taxable person is experiencing financial difficulties, they may request a payment arrangement by e-mail on ecommtax [dot] mof [dot] gov [dot] cy (ecomm[at]tax[dot]mof[dot]gov[dot]cy) explaining the reasons that lead to unavailability of settling the amount in due time.

Reimbursements

As the Member State of consumption, do you require the taxable person to submit an additional claim before making the reimbursement?

No

Reimbursement threshold as Member State of consumption

No

Release from payment of insignificant amounts of VAT

Cyprus has not implemented rules under its domestic legislation whereby taxable persons are released from the payment of the VAT where the amount due is insignificant.

Refund of deductible VAT by non-EU established trader

If you have business operations in a non-EU country

You may be entitled to a VAT refund on goods and services purchased in Cyprus if your business is not liable to pay VAT on sales in Cyprus and your business does not have a permanent establishment in Cyprus.

VAT paid in connection with the importation of goods can also be refunded.

If your business is located in a non-EU country, you can request a refund by registering at our portal and submitting a claim. The link to our portal can be found here. Applications for VAT refunds must be made within 6 months after the end of the calendar year to which the refund period relates.

For more information on VAT Refund, you may contact us by e-mail on: hqtax [dot] mof [dot] gov [dot] cy (hq[at]tax[dot]mof[dot]gov[dot]cy)  AND operationsvat [dot] mof [dot] gov [dot] cy (operations[at]vat[dot]mof[dot]gov[dot]cy)

or by phone on (+357) 22 601846 or  (+357) 22 601850

Penalties for non-compliance (as Member State of consumption)

Failure to register and late registration

In principle the failure to register or late registration under the OSS may result in the taxpayer having to register under the standard procedure.

• The possible consequence for failure to register is a penalty fee of €85 late registration fee.

Non-submission and late submission of VAT returns

In respect of the VAT returns the following penalties are applicable:

• €100 for every late/non-submitted VAT Return

Non-payment and late payment of VAT

• 10% Additional VAT on the amount due which is capitalised and
• Interest charge charged on a monthly basis based on every completed month where the payment has not been made.

Reference to the above may be found in Article 45 of the 95(I)/2000 VAT Law as Ammended.

Incomplete and incorrect VAT returns

If a taxable person has filed incomplete or incorrect VAT return, the Cyprus Tax Administration may impose missing VAT to be paid.  Additionally, the Cyprus Tax Administration may impose tax increase.

Reference to the above may be found in Article 49 of the 95(I)/2000 VAT Law as Ammended.

Non-compliance with accounting obligations

The possible consequence for breaching the OSS or IOSS related accounting obligations might result in a penalty fee depending on the circumstances.

Reminder Messages

In Cyprus, there are separate procedures regarding sending of reminders as Member State of Identification, or Member State of Consumption.

• When Cyprus is MSID, VAT return reminders and Payment reminders (for traders identified in Cyprus for OSS purposes) are sent by e-mail and by an in-system notification to the taxable persons. 

Exclusion and Appeals

Appeal procedures

Taxpayer registered in OSS may claim a file for adjustment to the Tax tribunal and/or Administrative Court  concerning:

• decision imposing tax
• decision imposing tax increase
   

For all other matters relating to the OSS may first be reviewed internally by the Commissioner. An email in this respect should be addressed to: ecommtax [dot] mof [dot] gov [dot] cy (ecomm[at]tax[dot]mof[dot]gov[dot]cy) 

Steps after exclusion/de-registration

Where a taxable person ceases to use the OSS/IOSS, and are liable to account for VAT in Cyprus the national VAT registration procedures shall apply. 

VAT registrations in Cyprus are made through the TFA Portal by first creating an account and then registering for a VAT number.

The link to access the portal is: https://taxforall.mof.gov.cy/