08/01/2004 14:53
The increase of the Value Added Tax in a number of products (either to 5% or to 15%) after the upcoming Cyprus’ accession in the European Union is obligatory. The reduced tax ratio of 5% will be imposed to books, magazines, newspapers, delivery of non-bottled water, transport of passengers and their luggage with city buses with transportation fare and equipment for the relief of infirmity.
Finance Ministry sources told StockWatch that the aforementioned goods will be imposed a reduced VAT ratio, which cannot be lower than 5%, according to the fifth EU instruction.
Children’s wear at 15%
On the other hand, a ratio of 15% will be imposed to children’s wear, as well as to liquid gas in cylinder. It is noted that according to the announcement of the Finance Ministry on Wednesday, Cyprus will maintain the reduced VAT ratio to hotels and tourist lodgings after the island’s accession. The sectors of hospitalization, education, insurance and financial services and lottery are exempted from the VAT system.
Misprint
The Finance Ministry clarified today that Cyprus will maintain the exemptions until 31.12.2007 (and not until July 2003 as it was previously mentioned) for the following three categories:
- A zero VAT to pharmaceutical products and food, except ice-cream, yogurt ice-cream, water-ice, spicy and salty products (from dried fruits, potato, cereals or substitutes such as crisps and cheese puffs for human consumption).
- A reduced VAT ratio (not lower than 5%) to restaurant services
- Exemption from the VAT on land.
New data
It is worth noting that according to the Finance Ministry announcement, “any person that purchases goods from another member state for private or family reasons, he/she will pay the VAT of the state that the purchase has been made”. Vehicles and goods that are subject to special consumer taxes are exempted.
As far as the purchase of new vehicles is concerned, “when a person purchases a new vehicle from a any EU member state, he/she does not pay the VAT of the state that the purchase has been made, but the VAT of the state in which he/she is resident”.
Finance Ministry sources told StockWatch that the aforementioned goods will be imposed a reduced VAT ratio, which cannot be lower than 5%, according to the fifth EU instruction.
Children’s wear at 15%
On the other hand, a ratio of 15% will be imposed to children’s wear, as well as to liquid gas in cylinder. It is noted that according to the announcement of the Finance Ministry on Wednesday, Cyprus will maintain the reduced VAT ratio to hotels and tourist lodgings after the island’s accession. The sectors of hospitalization, education, insurance and financial services and lottery are exempted from the VAT system.
Misprint
The Finance Ministry clarified today that Cyprus will maintain the exemptions until 31.12.2007 (and not until July 2003 as it was previously mentioned) for the following three categories:
- A zero VAT to pharmaceutical products and food, except ice-cream, yogurt ice-cream, water-ice, spicy and salty products (from dried fruits, potato, cereals or substitutes such as crisps and cheese puffs for human consumption).
- A reduced VAT ratio (not lower than 5%) to restaurant services
- Exemption from the VAT on land.
New data
It is worth noting that according to the Finance Ministry announcement, “any person that purchases goods from another member state for private or family reasons, he/she will pay the VAT of the state that the purchase has been made”. Vehicles and goods that are subject to special consumer taxes are exempted.
As far as the purchase of new vehicles is concerned, “when a person purchases a new vehicle from a any EU member state, he/she does not pay the VAT of the state that the purchase has been made, but the VAT of the state in which he/she is resident”.
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