Cyprus Tourism Organisation incorporates tax in VAT

The Cyprus Tourism Organisation (CTO) has scrapped its dreaded 3% CTO tax, incorporating it in the VAT on all restaurant and hotel bills, which is now proposed to be hiked from 5% to 8%, according to a bill tabled before the House.

The CTO generates some CYP 18 mln in annual revenue from the 3% CTO tax imposed on all restaurant and hotel bills. CTO Chairman Photis Photiou also asked the House for a supplementary budget of CYP 3.4 mln of which CYP 2.33 mln will be paid in the form of VAT to the government for advertisements placed abroad.

The CTO is using the option to pay the VAT on advertisements placed abroad promoting Cyprus to the government instead of paying it to the EU member state where the advert was placed.

Of the remaining amount, some CYP 1 mln refer to additional advertisements that the CTO wishes to place abroad and the rest will cover the cost of establishing CTO offices in Thesaloniki and more help for its Vienna office.