Amendments to the VAT law have been approved

The Parliament of Cyprus unanimously approved amendments to the VAT law that regulate tax exemptions for small businesses, including those engaged in cross-border activities.

Previously, the tax exemption applied only to companies registered in the country where VAT was paid. This created unequal conditions for small companies from other EU countries.

According to the new provisions, foreign companies are now also exempt from VAT if their turnover in Cyprus does not exceed €15,600 and does not exceed €100,000 across the European Union.

The Ministry of Finance believes that the new regulation will reduce the administrative burden for companies operating in several EU countries and allow them to compete on equal terms with local businesses. It will also simplify calculations and reporting for small and micro-enterprises.

"The new scheme creates fair competition conditions and supports small and medium-sized enterprises (SMEs), especially those operating outside Cyprus. Companies are able to engage in cross-border trade without tax pressure — on equal terms with local ones," said Chair of the Parliamentary Finance Committee Christiana Erotokritou.