Indirect tax ebook - Cyprus

General Tax Application/Time of Supply

Supply of goods

Chargeable events – supplies

The output VAT to be shown on a VAT return is that for supplies and other outputs treated as made in the period, and input VAT is that on supplies and other inputs treated as received in the period.

The date when a supply is treated as made or received is generally the earliest of: 

1. the date when the supply is actually made, being: 
1. in the case of a supply of goods, the date when delivery commences or, if the goods are not to be removed, the date when they are made available to the customer; and 
2. in the case of a supply of services, the date when the service is performed. This is generally taken as being the date when performance is completed; 
2. the date when a payment is received by the supplier, to the extent of the payment; or
3. the date when a VAT invoice is issued by the supplier, to the extent of the amount invoiced.
   

There is a special rule that, if a supply is performed and, within 14 days afterwards, the supplier issues a VAT invoice, the date of the invoice is taken as the time of supply, notwithstanding the earlier performance.

There are also special rules for a number of supplies, such as continuous supplies of services and supplies of electricity, etc. These generally involve ignoring the performance of the supply and treating the supplies as made at the earlier of the date of payment and the date of the invoice.

Chargeable events - imported goods
The chargeable event for the importation of goods from outside the EU is generally the date of importation, and it is by reference to this date that the VAT is included as input tax on the importer’s VAT return.

For goods imported from elsewhere in the EU the chargeable event which triggers the importers liability to VAT on the acquisition, and possible entitlement to reclaim the VAT as input tax, is the earlier of:

• the 15th day of the month following that in which the goods are dispatched by the supplier; or
• the date when the supplier issues an invoice in respect of the transaction.

Time when tax is due as a main rule
If the return shows that VAT is payable then payment should be made within the same period allowed for filing the return i.e. not later than the 10th day of the second month following the month in which the quarter has ended (i.e. maximum 40 days after the quarter end). Payment can only be made with a banking institution organised to receive payments for VAT.

Supply of services

Services
New legislation as from 01/01/2010

New rules
As from 01/01/2010 the basic rule for the place of supply of services between businesses (B2B– Business to Business) will be the place where the recipient of the service is established or has establishment for which the services are provided. With the new basic rule the recipient of the service will have the obligation to account for VAT through the provisions of the reverse charge mechanism.

Following the new rules the place of supply of services to non-taxable persons (B2C - Business to Consumers) is the place where the provider of the service is established.

1. Special rules for supplies provided in cases of B2B or B2C: 
• Immovable property - where the property is located 
• Passenger transport - at the place where physically the transport takes place 
• Cultural, artistic, sporting, scientific, educational, entertainment and similar services and/or services related to the admission, ancillary transport activities and valuations of and work on movable property - where those services are carried out 
• Restaurant and catering services (other than those physically carried out on board ships, aircraft or trains during the section of a passenger transport) - is the place where those services are physically carried out 
• Short term hiring of means of transport - where the means of transport is actually put at the disposal of the customer
• Restaurant and catering services for consumption on board ships, aircraft or trains - at the place of departure of the passenger transport service.
2. Special rules in relation to supplies to non-taxable persons: 
• Intermediary services - at the place where the transaction takes place
• International transport of goods - where the transport takes place
• Intra-Community transport of goods - at the place of departure
• Ancillary transport activities - at the place where the transport takes place
• Valuations of and work on movable property - where physically executed
• Supply of electronic services - at the place of the recipient. 
3. Special rules re Supply of services to non-taxable persons outside the Community.
   
   The place of supply of services will be the place where the client has his establishment for: 
• Transfers and assignments of copyrights, patents, licenses, trade marks and similar rights
• Advertising services
• The services of consultants, engineers, consultancy firms, lawyers, accountants and other similaservices, as well as data processing and the provision of information
• Obligations to refrain from pursuing or exercising, in whole or in part, a business activity or a right referred to in the relevant article
• Banking, financial and insurance transactions including reinsurance, with the exception of the hire of safes
• The supply of staff
• The hiring out of movable tangible property, with the exception of all means of transport
• The provision of access to, and of transport or transmission through, natural gas and electricity distribution systems and the provision of other directly linked services 
• Telecommunications services
• Radio and television broadcasting services
• Electronically supplied services 
  
   

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