Zero rated VAT to be abolished in Cyprus in January 2011

The Ministry of Finance announces that in order to comply with its EU obligations, zero – rated VAT in a wide range of food, medicine and vaccines will be abolished as of the 10th of January 2011.

A press release by the Ministry of Finance says that food, medicine and vaccines, which were taxable with a low VAT of 5% will not be affected, following the approval of new tax legislation.

As of January 10th 2011, a VAT of 5% will be imposed on all food and beverages, excluding alcoholic drinks, beer, wine and soft drinks, which will have a VAT of 15%.

On the same date, zero – rated VAT will be abolished on the delivery of medicine and vaccines and a 5% VAT will be imposed.

Delivery of ready made or non ready made food or drinks – excluding alcoholic drinks, beer, wine and soft drinks- with or without transport costs i.e take away, delivery, which have no other support services, will also have a VAT of 5% as of the 10th of January, 2011.