VAT on Importing Goods into Cyprus

What is import VAT?

When goods are brought into Cyprus from a country outside the European Union import VAT is charged at the point of entry. The rate is 19% — the standard Cyprus VAT rate — applied to the customs value of the goods. The customs value is not just the price you paid for the goods — it includes the cost of insurance and freight to the point of entry into the EU (CIF value). This means import VAT is calculated on a higher base than the purchase price alone.

How import VAT is calculated

Import VAT is calculated on the customs value — which is the transaction value of the goods plus the cost of transport and insurance to the first point of entry into the EU customs territory. If you buy goods for €10,000 and freight and insurance to Cyprus costs €1,500, the customs value is €11,500 and the import VAT is €11,500 × 19% = €2,185. Customs duties may also apply on top of import VAT depending on the goods category and origin country — these are separate from import VAT and generally not recoverable.

How to reclaim import VAT

VAT-registered Cyprus businesses can reclaim import VAT as input VAT on their quarterly VAT return. The import VAT must be supported by the C88 customs import entry — the official customs declaration document — which serves as the equivalent of a VAT invoice for imported goods. Include the import VAT amount in your input VAT figure on the return for the period in which the customs declaration was processed. Retain the C88 and all customs documentation for 6 years.

Non-VAT-registered businesses importing goods

A business that is not VAT registered must pay import VAT at the point of entry and cannot reclaim it. The import VAT becomes an additional cost of the goods — built into the purchase cost in the accounts. For businesses importing regularly at volumes approaching the €15,600 threshold voluntary VAT registration becomes even more attractive — the import VAT savings alone can justify the compliance cost.

Goods from the EU — no import VAT

Import VAT only applies to goods coming from outside the EU. Goods moving between EU member states — from Germany, France or any other EU country to Cyprus — are not subject to import VAT at the border. Instead the buyer accounts for acquisition VAT on their Cyprus VAT return and simultaneously claims the same amount as input VAT — netting to zero for fully taxable businesses. The acquisition VAT mechanism replaces border VAT for intra-EU movements.