VAT changes as of 01/01/10
VAT changes effected as of 1/1/2010 in Cyprus can be summarized as follows:
1. Changes to the country of taxation of services provided from business to business.
These changes apply for all services except from the ones stated below: (a) Services which are directly related to immovable property (b) Restaurant services and services supplied in the course of catering (c) Leasing of means of transport (d) Scientific and educational services (e) Sporting and cultural services.
2. Compliance obligations for persons who supply services and goods
As from 1 January 2010 businesses are required to submit a monthly declaration for intracommunity supply of services which are taxed under the reverse charge provisions in another Member State. Services which must be included are solely those taxed for VAT purposes in the other Member State. Effectively, this means that businesses must be aware of the VAT treatment of services on behalf of the EU Member State of the recipient of these services. The VIES returns for intracommunity supply of goods must also be submitted on a monthly basis, via electronic means.
3. Changes in the time of supply of services for which VAT is due by the recipient
The time of supply of services which are subject to VAT by the recipient under the reverse charge provisions are (1) the date at which supplying the service was completed and (2) the date at which payment was made. In the case of services supplied over a period of one year non-stop, VAT will be due at the end the calendar year.
4. Procedure for refund of VAT paid in another Member State
The said procedure becomes electronic in form.
5. Changes to the country of taxation of services, supplied from business to consumers.
The place of taxation of services is the place where the supplier has established its business. Nonetheless, in the case that the services are provided from a fixed establishment in a place other than that where the supplier has established its business, the place of supply will be the place where that fixed establishment is.
