5% Reduced Vat Rate Applicable On Tourism Services – Tax – Cyprus

Cyprus:

5% Reduced Vat Rate Applicable On Tourism Services

VAT DECREE Κ.Δ.Π 268/2020 WAS ISSUED BYTHE
CABINET ON THE 23RD OF JUNE 2020 TO TEMPORARILYREDUCE THE VAT RATE
ON TOURISM SERVICES

VAT Decree Κ.Δ.Π 268/2020 was issued by the
cabinet on the 23rd of June 2020 to temporarily reduce the VAT rate
on tourism services.

The reduction of the VAT rate from 9% to 5% will be applicable
for the period from the 1st of July, 2020 to the 10th of January,
2021, for:

1. hotel accommodation, hotel apartments
   accommodation and similar establishments, including holiday
   accommodation;
2. restaurant and catering
   services;
3. transport of passengers and their
   accompanied luggage

As it is clarified, restaurant services consist of the supply,
rendered in the premises of the supplier, of prepared or unprepared
food and/or beverages for human consumption, accompanied by a
sufficient support service allowing for the immediate consumption
thereof, while catering services consist of the same supply,
rendered off the premises of the supplier.

It is further clarified that catering is characterised by a
cluster of features and acts in which services largely predominate,
and of which the provision of food and/or beverages is only one
component.

Therefore, the supply of prepared or non-prepared food or
beverages or both, with or without transportation, not accompanied
by other support services, is not considered restaurant and
catering service.

Finally, the reduced VAT rate of 5% will be applicable for the
transport of passengers and their accompanied luggage within the
Republic, by urban, intercity and rural taxis, as well as, by
tourist and intercity buses.

Originally published 13 August, 2020

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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