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Cypriot VAT Hikes Take Effect


16/01/2014

Cyprus's headline and intermediate value added tax rates were increased by one percent, as scheduled, from January 13, 2014.

The headline rate, levied on 80 percent of goods and services, rose from 18 percent to 19 percent.

The 8 percent reduced rate was increased to 9 percent. This reduced rate applies to accommodation services, food and drink sold by restaurants and eateries, catering services, and the transportation of passengers and their luggage within Cyprus.

The two hikes were agreed as part of the bailout negotiated with the troika of lenders in March 2013. Cyprus earlier increased its headline rate from 15 percent to 17 percent from March 1, 2012, and again to 18 percent with effect from January 14, 2013. The territory's other reduced rate, set at the EU minimum of 5 percent, has remained unchanged.

Even after the two hikes, Cyprus retains one of the most competitive headline rates in the European Union, bettered only by Luxembourg (15 percent) and Malta (18 percent).

www.tax-news.com

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