VAT Changes from 01.01.2010

Amendments in Cyprus as at 01.01.2010

As at 01.01.201 the following changes have been implemented for VAT in Cyprus for goods and services within the ΕU

1. Rules determining the place of supply which will determine the country in which the VAT will be applied. Prior to Jan 2010 the place of supply, and therefore the VAT taxing point, is where the service provider is established, from 1 January 2010, for supplies provided business to business (Β2Β) the taxing point has changed from the service provider to the service recipient (the reverse charge mechanism).

This means that the service provider will not charge VAT but the recipient wi11 need to account for themselves the VAT payable on the services received. The VAT is then deductible to the recipient, if they are registered for VAT in the same way as per the norma1 rules. These changes apply to all services except from

a) services directly related to immovable property

b) restaurant and catering services

c) leasing of means of transport

d) scientific and educationa1 services

e) sporting and cultura1 events

For supplies of services provided business to consumers (B2C), the taxing point remains where the supplier of service has it's business estab1ished. Where the services are provided from a permanent establishment in another place other than where the service provider has his business established, the place of supply wi11 be that permanent establishment. Supplies of goods and services outside the ΕU continue to be outside the scope of ΕU or Cyprus V ΑΤ, therefore VATis not applicable. VAT applicable to third country jurisdictions Μ11 be determined by ίndiνidua1 third country VAT law (if any).

2. Compliance Obligations for services provided Β2Β Businesses will now be required to submit a monthly report (VIES Π), electronically, for intra-community supplies of services taxed under the reverse charge provisions in another member state (MS). Services to be reported on are on1y those for which VAT applies in the other MS, so businesses will need to be aware of the VAT treatment of those services in the other MS.

3. Changes in the time supply of services that ν ΑΤ is due by the recipient. The time of supply of services subject to ν Α Τ by the recipient under the reverse charge provisions are

a) the date the supply was completed, or

b) the date that payment was made

 For services supplied non-stop over the period of one year VAT is due at the end of the calendar year

VAT Obligations if an entity is registered

The following obligations arise in the event you register for VAT. 

• Quarterly VAT return. The return is submitted quarterly and is due on the 10^th day of the following month, following the month from the quarter end. For example, the VAT return for the Jan - Mar quarter is due on the 10^th May. The VAT office will decide your quarterly reporting periods and will send you a pre-populated form to complete. The VAT can be paid at any participating bank and the form needs to be submitted to the VAT office. Alternatively, it can be lodged electronically through Taxisnet, after payment of the VAT at any local bank.
 
• VIES reporting. The new VIES (VAT Information Exchange System) reporting requirements, known as VIES II, is submitted monthly and is due on the 10^th day of the month following month end. Reporting for January is due on Feb 10. VIES II replaces the former reporting requirements of VIES I, which was due quarterly. The forms are available from the web-site and show the supplies of goods and services to EU member states