Do I charge Cyprus VAT when invoicing a UK company for services?

For B2B services the B2B general rule applies — place of supply is the UK. No Cyprus VAT is charged. The UK company accounts for reverse charge VAT under UK VAT rules. Validate their UK VAT number before issuing a zero-rated invoice.

I receive invoices from a US company with no VAT — do I owe anything?

Yes — reverse charge applies. Declare the VAT amount as both output and input on your Cyprus return. For a fully taxable business the net is zero. For partially exempt businesses there is a real cost on the irrecoverable portion.

Do I need to register for VAT in other EU countries if I sell to them?

Not for most cross-border service and digital sales — reverse charge handles B2B and OSS handles B2C. Local registration may be needed if you hold stock in another country or have a fixed establishment there.

Cross-Border VAT for Cyprus Businesses: Complete Guide 2025/26

The cross-border VAT framework for Cyprus businesses

A Cyprus business trading exclusively within Cyprus faces a relatively simple VAT position. The moment that business starts selling to customers abroad or buying services from foreign suppliers the VAT complexity increases significantly. Each type of cross-border transaction has a different treatment — and combining multiple types of international trading without understanding the rules can create liabilities in multiple jurisdictions simultaneously.

Cross-border VAT — quick reference by transaction type

Transaction	VAT treatment	Key requirement
Goods exported outside EU	Zero-rated Cyprus VAT	Export documentation required
Goods sold to EU business (intra-EU)	Zero-rated	Customer VAT number + VIES validation
Services to EU businesses (B2B)	Reverse charge	Customer VAT number + VIES validation
Digital services to EU consumers (B2C)	Customer's local rate	OSS registration above €10,000
Services to non-EU businesses	Outside scope	Evidence customer is non-EU
Receiving services from non-Cyprus suppliers	Reverse charge	Declare on your own VAT return
Goods imported into Cyprus	Import VAT at point of entry	Deductible as input VAT if for business

Reverse charge on received services — the most commonly missed rule

When a Cyprus VAT-registered business receives services from a supplier outside Cyprus — a UK consultant, a US software company, an EU marketing agency — the reverse charge mechanism applies. The foreign supplier invoices without VAT. You declare both output VAT and input VAT on your Cyprus return. For a fully taxable business the net effect is zero. For partially exempt businesses there is a real VAT cost. Failure to apply reverse charge on received services is one of the most commonly identified errors in Cyprus VAT audits.

Selling digital services to EU consumers — OSS

If you sell SaaS, streaming, downloads or other digital services to consumers — not businesses — in other EU countries the place of supply is where the consumer is located. A French consumer pays French VAT at 20%. A German consumer pays German VAT at 19%. Once your cross-border EU B2C digital sales exceed €10,000 per year you must either register for VAT in each country or register for OSS in Cyprus. OSS lets you file one quarterly return in Cyprus covering all EU consumer sales.

Exporting goods — zero-rating evidence requirements

Goods exported from Cyprus to non-EU destinations are zero-rated — no Cyprus VAT is charged. But zero-rating is not automatic. You must retain export documentation proving the goods left the EU — the customs export declaration, bill of lading or airway bill and commercial invoice. Without adequate documentation the Tax Department can disallow the zero-rating and assess 19% VAT on the full export value. The risk sits with the seller.

Cross-Border VAT for Cyprus Businesses

In this guide

The cross-border VAT framework for Cyprus businesses

Cross-border VAT — quick reference by transaction type

Reverse charge on received services — the most commonly missed rule

Selling digital services to EU consumers — OSS

Exporting goods — zero-rating evidence requirements

Work out the VAT on your own figures

In this guide

The cross-border VAT framework for Cyprus businesses

Cross-border VAT — quick reference by transaction type

Reverse charge on received services — the most commonly missed rule

Selling digital services to EU consumers — OSS

Exporting goods — zero-rating evidence requirements

Related on tax.com.cy

Work out the VAT on your own figures