The Cyprus Ministry of Finance announced on 19 October 2026 the extension of the zero VAT rate (0%) on a defined list of basic foodstuffs and essential goods until 31 December 2027. This measure, originally introduced as a temporary anti-inflationary relief, covers items such as bread, milk, eggs, fresh vegetables, fruit, meat, fish, and certain baby products. The extension is enacted through an amendment to the VAT Law and aims to support household purchasing power amid ongoing economic pressures. Businesses supplying these goods must continue to apply the 0% rate on invoices, maintain proper records for VAT reporting, and ensure correct classification under the relevant CN codes. The Tax Department will publish an updated list of eligible products and detailed guidance on invoicing and reporting requirements.
Key Takeaways
- Extended Relief: Zero VAT rate on basic goods prolonged for over a year, until end of 2027.
- Product Coverage: Applies to a specific basket of essential food and hygiene items; businesses must verify CN code eligibility.
- Compliance: Suppliers must issue invoices showing 0% VAT, retain supporting documentation, and report correctly in VAT returns.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement