Cyprus operates a value-added tax (VAT) system known locally as Foros Prosthemenis Axias (FPA). Cyprus has been a member of the European Union (EU) since 2004, and its VAT framework is aligned with the principles of the EU VAT Directive.
Cypriot VAT is governed primarily by the Value Added Tax Law (Law 95(I)/2000) and related regulations. VAT is administered by the Tax Department of the Republic of Cyprus. The Tax Department is responsible for issuing guidance, processing VAT registrations and returns, overseeing compliance obligations, and enforcing VAT rules in Cyprus.
Businesses carrying out taxable activities in Cyprus — whether resident or nonresident — must comply with Cypriot VAT obligations. This includes VAT registration where required, applying the correct VAT rates, issuing VAT-compliant invoices, maintaining appropriate accounting records, and filing periodic VAT returns in accordance with Cypriot and EU VAT rules.
