Cyprus VAT rates in 2026.

1. The five rates at a glance

Many summaries still describe Cyprus as a four-rate system. Since July 2023 there have been five:

• 19% — standard rate. The default for goods and services.
• 9% — reduced. Restaurants and catering, hotel accommodation, domestic passenger transport.
• 5% — reduced. Basic foodstuffs, pharmaceuticals, bottled water, certain renovation works, and other basic-need categories.
• 3% — super-reduced, introduced July 2023. Books, newspapers and periodicals (physical and electronic), certain equipment for persons with disabilities, and certain services such as street cleaning and waste collection when not supplied by public authorities.
• 0% — zero-rated. Exports, intra-community supplies to VAT-registered EU buyers, certain international services — plus a temporary basket of essential goods (section 6).

Alongside the rates sit the exemptions — financial services, insurance, education, healthcare, most immovable-property transactions — which are not a rate at all, and behave very differently (section 7).

2. The standard rate — 19%

19% is the default. If a supply does not fall into a reduced-rate schedule or an exemption, it is standard-rated: office supplies, fuel, professional services, electronics, software subscriptions, adult clothing, alcohol, restaurant alcohol sales (the meal is 9%, the wine is 19%), and most retail goods.

In bookkeeping terms, 19% is also the safe-but-lazy default that causes errors. Coding a whole supermarket receipt at 19% over-collects VAT on every 5%, 3% and 0% line on it. The standard rate should be applied per line, after the reduced categories have been ruled out — not per receipt because checking lines takes time.

3. The 9% rate — hospitality and transport

The 9% rate covers most of the hospitality economy: restaurant and café meals including takeaway, catering, hotel and similar accommodation, and domestic passenger transport (taxis, buses, domestic sea and air routes).

The classic traps: alcohol served with a restaurant meal is 19%, not 9% — a dinner receipt routinely carries both rates. A hotel folio can carry three: the room at 9%, mini-bar items at 19%, and a newspaper at 3%. Hospitality receipts are the strongest argument for per-line rate handling anywhere in the Cyprus system — which is why we built a dedicated page on VAT bookkeeping for restaurants and hotels.

4. The 5% rate — basic needs

The 5% rate covers a long schedule of basic-need supplies, including: most basic foodstuffs, pharmaceutical products and vaccines, bottled water, animal feed, agricultural inputs (seeds, fertilisers), hairdressing services, entry to cultural and sports events — and, under conditions, the renovation and repair of private homes and the acquisition or construction of a primary residence.

The residence cases carry conditions (size limits, primary-use declarations) and are the subject of frequent amendment; treat any 5% property invoice as a check-the-conditions item rather than a default.

5. The 3% rate — the newest one

Introduced in July 2023, the 3% super-reduced rate moved several categories down from 5%, most visibly books, newspapers, magazines and periodicals — physical and electronic alike. It also covers certain equipment and aids for persons with disabilities, and certain services such as street cleaning and waste collection when supplied privately rather than by public authorities.

Because the rate is newer than most reference material, 3% lines are the ones most often miscoded as 5% in practice. A bookshop receipt from 2026 at 5% is wrong; the printed rate on the receipt is right. This is exactly why Pileform never overrides a rate that is printed on the document — the printed rate reflects the law at the time of supply better than a stale lookup table does.

6. 0% and the temporary essentials basket

The permanent zero-rated category covers exports, intra-community supplies of goods to VAT-registered buyers in other member states (with VIES-validated numbers and proof of transport), international transport, and certain related services.

On top of that, Cyprus has been running a temporary 0% basket of essential goods — introduced as a cost-of-living measure and extended several times, currently legislated to run to 31 December 2026. The basket has included items such as bread, milk, eggs, baby food, baby and adult nappies, and feminine hygiene products; its exact contents have been amended along the way. Two practical consequences:

• Supermarket receipts now mix four or even five rates routinely — see our retail VAT page for how that plays out at the till.
• When the basket lapses or changes, the printed rates on receipts change with it. Bookkeeping that reads the printed rate adapts automatically; bookkeeping that relies on category lookup tables silently goes wrong.

7. Zero-rated is not exempt

The distinction that matters for input VAT recovery:

• Zero-rated (0%) supplies are taxable supplies at a rate of zero. The supplier charges no VAT but keeps the right to reclaim input VAT on costs attributable to those supplies.
• Exempt supplies are outside the charge. No VAT is charged — and input VAT attributable to exempt supplies is not recoverable. A business making both taxable and exempt supplies must apportion its input VAT (partial exemption).

Common exempt categories in Cyprus: financial services, insurance, education, healthcare, lettings and most sales of immovable property (new buildings are the main exception). For a mostly-exempt business — a clinic, a school, an insurance broker — the VAT on costs is largely a real cost, and the bookkeeping question shifts from “what do we reclaim?” to “what can we attribute to the taxable sliver?”.

8. Mixed-rate receipts in practice — and tools that help

The rate schedule only becomes hard at the till. One supermarket run: bread at 0% (temporary basket), milk at 0%, a magazine at 3%, paracetamol at 5%, dishwasher tablets at 19%. One restaurant bill: meal at 9%, wine at 19%. The return is only right if every line carries its own rate.

• Cyprus VAT receipt extraction reads the rate printed against each line and applies it — 19 / 9 / 5 / 3 / 0 — flagging in yellow anything it had to infer.
• Quarter-end PDF to Excel does it for the whole period’s pile at once.

The principle is the one this whole page implies: the printed rate wins. Categories drift, baskets get extended, rates get introduced — the receipt in your hand reflects the law on the day of supply.

9. References

• Cyprus Tax Department — the definitive rate schedules and amendment announcements.
• EU VAT Directive (consolidated) — the framework within which the national rates sit.

For the rest of the system — registration, returns, retention — see Cyprus VAT essentials, and for filing mechanics see filing your VAT return on TFA.

Unsure which rate a specific supply takes? Send the case to contact@pileform.com — a person reads it and replies within one business day.