Temporary Application of Zero VAT Rate for Essential Items

On 2 May 2023 the Council of Ministers of the Republic of Cyprus approved a Decree which amends the VAT Law in order to provide for a zero rate of VAT on supplies of specific items. This measure is temporary and will be effective from the date the Decree will be published in the Official Gazette (5 May 2023) until 31 October 2023.

The zero rate of VAT will apply to the following items:

  • Bread: all types of bread, fresh or frozen, with or without sourdough (e.g., white, black, wholegrain, multigrain, rustic, rye, cornbread, baguette, ciabatta, sliced bread, loaves, bread rolls, pittas). Pastries, rusks and any bread with added ingredients such as raisins, nuts, herbs are not included.
  • Milk: fresh (e.g., cow, goat, sheep), sweetened, concentrated, long-life, flavoured (e.g., chocolate, banana), plant milk (e.g., almond, soy, rice).
  • Eggs
  • Baby food: powdered, dry and/or wet form, intended for consumption by children. Snacks (e.g., chips, nuts, sweets, chocolates, ice cream) are not included.
  • Baby and adult diapers
  • Products for feminine hygienic protection (tampons, sanitary pads and incontinence pads).

As per the provisions of the VAT legislation, all businesses affected by the above change should perform a stock count before the new provisions come into effect.

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