Cyprus VAT rates in 2026: 19%, 9%, 5%, 3% and 0% explained
Cyprus has five VAT rates. Here is what each one covers, how to pick the right one on an invoice, and the mistakes that cost businesses money.
Cyprus has five VAT rates in 2026: a standard rate of 19%, two reduced rates of 9% and 5%, a 3% rate for a few items such as books and newspapers, and 0% for zero-rated supplies. Most businesses only ever use one or two of them, but charging the wrong one is one of the easiest ways to end up owing money to the Tax Department.
This guide explains what each rate is for and how to get it right on your invoices and expenses.
The five rates at a glance
| Rate | What it usually covers |
|---|---|
| 19% | The standard rate: most goods and services, including professional services, electronics and most retail |
| 9% | Hotels and restaurants, passenger transport, and some other services; household electricity is also at 9% for now |
| 5% | Many foodstuffs, medicines, some construction and renovation work, and first homes under conditions |
| 3% | A small group of supplies such as books, newspapers and magazines |
| 0% | Zero-rated supplies, for example exports outside the EU and certain essential goods covered by temporary measures |
The lists change from time to time, especially the reduced and temporary rates. Treat the table as a guide and check anything unusual with your accountant.
Tip: "0% VAT" and "exempt from VAT" are not the same thing. A zero-rated supply is still a taxable supply that goes on your VAT return; an exempt one is outside VAT altogether. The difference matters for how much VAT you can reclaim on your own costs.
How to pick the right rate on an invoice
Start from what you are selling, not from who you are selling to. A consultant charges 19% whether the client is a shop or a hotel; a restaurant charges its reduced rate on meals no matter who eats them.
- Decide what the supply is (a service, goods, a meal, accommodation).
- Check whether a reduced rate or an exemption applies to that supply.
- If nothing specific applies, it is 19%.
- If one invoice mixes supplies at different rates, show each line with its own rate. Good invoicing software works out the VAT per rate and shows the totals separately.
In ToLogistiko the Cyprus rates are set up for you in every new workspace, so you choose the rate per line and the totals are calculated per rate. See what is already set up for Cyprus.
VAT on your expenses
The same rates apply to what you buy. When you record an expense, record the amount before VAT and the rate, rather than just the total, so your accountant can see exactly how much VAT you paid and can reclaim.
Some bills mix charges at different rates, or charges that carry no VAT at all. The electricity bill is the classic example; we explain it in why your EAC bill doesn't add up.
Common mistakes
- Charging 19% on everything because it is the default in your software, even when a reduced rate applies to your trade.
- Treating exempt income as zero-rated (or the other way round), which changes what you can reclaim.
- Recording expenses at their total without splitting out the VAT, so the VAT you paid is never claimed.
- Using an old rate after it changed. Temporary reduced rates have start and end dates.
In short
Most of your sales will be at 19%, and the reduced rates apply to specific trades and goods. Put the correct rate on every invoice line, record the VAT on every expense, and ask your accountant whenever a supply does not obviously fit. If you want invoices that calculate this for you, see how invoicing works in ToLogistiko.
