Simplify VAT across your entire Cyprus group.
VAT grouping lets multiple Cyprus companies act as a single VAT entity. One return, one VAT number, and intra-group transactions outside the scope of VAT entirely.
The short answer
A VAT group lets closely linked companies established in Cyprus register as a single taxable person, with one VAT number and one return. Supplies between members of the group are outside the scope of VAT, but every member is jointly and severally liable for the group's VAT. Structuring a group of companies? tax.com.cy explains how a Cyprus holding company works.
- Standard rate
- 19%
- Registration threshold
- €15,600
- Months per return
- 3
- Keep VAT records for
- 6 years
One VAT number
Covers all group members
Single registration
Intra-group supplies
Outside scope of VAT
No VAT on internal transactions
Joint liability
All members liable for group VAT
Understand before applying
Is your group eligible for VAT grouping?
Are all entities incorporated or established in Cyprus?
Does one entity control the others — through majority shareholding, voting rights or board control?
Are all entities either VAT registered or eligible to be VAT registered?
Are all entities making or intending to make taxable supplies?
VAT Grouping — How it works
Intra-group supplies
Transactions between group members are disregarded for VAT purposes. No VAT invoiced, no input VAT to reclaim on internal charges.
Single return
One quarterly VAT return covers all group members. One payment or refund position for the whole group.
Representative member
One entity is nominated as the representative member and is responsible for filing returns and paying VAT on behalf of the group.
Joint and several liability
All group members are jointly and severally liable for the group's VAT debts. If one member cannot pay the Tax Department can pursue any other member.
Quantify the Benefit for Your Group
The main cash flow benefit of VAT grouping comes from eliminating VAT on intra-group charges. Enter your current intra-group transaction volumes to see the impact.
Applying for VAT Group Registration
Confirm eligibility
Control relationship, all Cyprus entities, all taxable
Identify representative member
Usually the parent or holding company
Complete VAT group application
Form submitted via Taxisnet
Tax Department review
Assessment of control structure and eligibility
Group VAT number issued
Single number for all members
Notify existing customers and suppliers
New VAT number on all invoices
File consolidated quarterly returns
Representative member files for whole group
Joint and Several Liability — What it Means
Every member of a VAT group shares full liability for the group's VAT debts. This is not limited to each entity's own VAT — if the group owes €200,000 and the representative member cannot pay the Tax Department can demand the full amount from any individual group member.
Before you group
Assess the VAT compliance health of each entity before including them. Any historic liabilities become the group's problem.
Leaving the group
A member leaving the group does not immediately escape liability for debts incurred while they were a member. The liability follows the period.
Insolvent member
If one group member becomes insolvent its VAT liabilities can be pursued from the remaining solvent members. Consider this in structuring decisions.
VAT Grouping and Partial Exemption — Read this first
If any member of the proposed VAT group makes exempt supplies — financial services, insurance, residential letting — grouping can negatively affect the group's partial exemption position. When a fully taxable entity joins a group that includes exempt entities the combined group may recover less input VAT overall than the entities did separately.
When grouping helps partial exemption:
The exempt entity has significant costs shared with taxable entities
Management charges between entities currently carry irrecoverable VAT
The group structure allows attribution of costs to taxable activities more accurately
When grouping hurts partial exemption:
A highly taxable entity joins a group with significant exempt supplies
The blended partial exemption recovery rate is lower than the taxable entity achieved alone
Overhead costs that were fully recoverable become partially restricted
Common VAT Group Structures in Cyprus
Holding company structure
Parent holding company plus operating subsidiaries. Management fees and recharges between entities are outside scope of VAT. One return covers the whole structure. Common for Cyprus holding companies with local operating subsidiaries.
Property development group
Development company, management company and property holding SPVs. Intra-group property management charges and development fees can flow without VAT. Capital goods scheme tracked at group level.
Professional services group
Multiple service entities under common ownership. Shared costs, central management and back-office charges flow without VAT. Particularly useful where one entity has exempt financial services income.
Frequently asked questions
Next deadline
VAT return for Q4 2026
10 February 2027
Work out the VAT on your own figures
Add or remove VAT at any Cyprus rate, with the rates from our facts table.
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