Cyprus VAT rise implementation

Following this week's  1% rise in Cypriot VAT to 19%, guidance on the VAT increase has been issued.  There was also an increase in the reduced VAT rate (transport of passengers, hotels and restaurants) from 8% to 9%.

In basic terms, the new, higher rate must be applied on the supply of any goods or services on or after 13 January 2014.  Any pre-payments must be at the new rate, too.   Payments for services or goods after 13 January for supplies completed prior to this date should be at the old, 18% VAT rate.

Any credit notes issued in the future on invoices at the old 18% rate should use the 18% rate is applied when the goods were supplied.

Companies holding stocks must perform full stock takes, which should be retained for inspection by the tax authorities for six years.