VAT on Professional Services in Cyprus

Professional services are standard-rated at 19%

Legal services, accountancy and tax advisory, management consulting, IT consulting, marketing, PR, engineering, architecture and most other professional services are standard-rated at 19% VAT in Cyprus. None of these services qualify for a reduced rate or exemption. A Cyprus law firm charging fees to Cyprus clients must charge 19% VAT on those fees if VAT registered. A Cyprus accountant charging management fees to a Cyprus company charges 19%. The only VAT variable is the place of supply — which determines whether Cyprus VAT applies at all.

Services to EU B2B clients — reverse charge

When a Cyprus professional services firm provides services to a VAT-registered business in another EU member state the B2B general place of supply rule applies. The place of supply is where the customer belongs — Germany, France, the Netherlands etc. The Cyprus firm invoices without VAT. The EU business customer accounts for VAT via reverse charge in their own country. The Cyprus firm must obtain and validate the customer's EU VAT number on VIES before issuing a zero-rated invoice.

Services to non-EU clients — outside scope

Services provided to businesses or individuals outside the EU — UK post-Brexit, US, UAE, Israel — are generally outside the scope of Cyprus VAT under the B2B and B2C rules. For B2B services to non-EU businesses the place of supply is where the customer is established — outside Cyprus and outside the EU. No Cyprus VAT applies. For B2C services to non-EU consumers the place of supply under the general rule is Cyprus — but in practice many B2C professional service providers to non-EU consumers also have no Cyprus VAT obligation if the service is consumed abroad.

Property-related professional services — the exception

Architects, surveyors, engineers and other professionals providing services directly related to a specific property are subject to the property exception. The place of supply for services related to immovable property is where the property is located — not where the supplier or customer is based. A Cyprus architect designing a building in France must charge French VAT on their fees regardless of whether their client is French. A UK surveyor valuing a Cyprus property charges Cyprus VAT on their fees.