When goods arrive in Cyprus from a non-EU country, customs duty is not the only charge — import VAT applies too. Understanding how VAT is calculated on imports, when you might be exempt, and how to reclaim it can save businesses significant money. This guide covers everything importers need to know about VAT on goods imported into Cyprus.
What Is Import VAT?
Import VAT (also called acquisition VAT) is charged on goods brought into Cyprus from non-EU countries. Unlike domestic VAT, import VAT is collected by Cyprus Customs at the point of entry — not by the seller. The standard rate in Cyprus is 19%, with a reduced rate of 9% on certain goods (food, hotel accommodation, some services) and 5% on books, newspapers, and some medicines.
Import VAT applies in addition to any customs duty payable. Both charges are collected at the time of customs clearance, before your goods are released.
Key point: Import VAT is a consumption tax, not a trade tariff. It applies to almost all goods regardless of their HS code or country of origin — unlike customs duty, which varies by product and origin.
How Import VAT Is Calculated
The VAT base is the customs value of the goods (CIF value) — the cost of goods, insurance, and freight to Cyprus — plus any customs duty payable. This means VAT is calculated on a higher base than the goods value alone.
Formula: Import VAT = (CIF value + customs duty) × VAT rate
Worked Example
Goods worth €1,000 CIF with a 5% customs duty rate:
- Customs duty = €1,000 × 5% = €50
- VAT base = €1,000 + €50 = €1,050
- Import VAT = €1,050 × 19% = €199.50
- Total charges = €50 + €199.50 = €249.50
Use our free Import Duty Calculator to estimate both customs duty and VAT on your shipment before it arrives.
When Is Import VAT Exempt?
Certain imports are VAT-exempt or zero-rated under Cyprus and EU legislation:
- Low-value consignments below €150 from non-EU countries — VAT is waived under EU low-value consignment rules (this threshold changed in 2021 when the previous €22 threshold was abolished)
- Personal effects under Transfer of Residence (TOR) — goods imported by individuals relocating to Cyprus may qualify for full duty and VAT relief
- Certain medical and humanitarian goods — specific categories defined by EU regulation
- Goods re-exported within a customs procedure — goods placed under a customs suspension procedure (such as a bonded warehouse) are not subject to VAT until they enter free circulation
- Goods originating in EU member states — intra-EU movements are not subject to import VAT at customs; instead, acquisition VAT rules apply
Note that even where customs duty is zero (for example, goods from a country with an EU trade agreement), import VAT still applies unless a specific VAT exemption covers the goods.
Can I Reclaim Import VAT?
If your business is VAT-registered in Cyprus, you can reclaim import VAT paid on goods used for your taxable business activities. Import VAT is an input tax credit, recoverable through your periodic VAT return. You will need the customs declaration (C88 form) as proof of payment.
For VAT-registered importers, import VAT is therefore a cash flow item, not a permanent cost — you pay it at clearance and recover it on your next VAT return. This is fundamentally different from customs duty, which is a permanent cost and cannot be recovered.
Non-VAT-registered importers — private individuals and businesses below the VAT registration threshold — bear the full VAT cost and cannot reclaim it. If you are importing regularly and your import VAT costs are significant, it may be worth reviewing whether VAT registration is appropriate for your business.
Import VAT vs Customs Duty — What Is the Difference?
| Feature | Customs Duty | Import VAT |
|---|---|---|
| What it is | EU trade tariff on non-EU goods | Consumption tax on all goods |
| Rate | Varies by HS code & origin (0–25%+) | 19% standard (9% / 5% reduced) |
| Calculated on | CIF customs value | CIF value + customs duty |
| Recoverable? | No — permanent cost | Yes — by VAT-registered businesses |
| Applies to EU goods? | No | Different rules (acquisition VAT) |
Frequently Asked Questions
The standard VAT rate on imports in Cyprus is 19%. A reduced rate of 9% applies to certain goods such as food, hotel accommodation, and some services. A 5% rate applies to books, newspapers, and some medicines.
Import VAT is calculated on the customs value of the goods (CIF — cost, insurance, freight) plus any customs duty payable. Formula: VAT = (CIF value + customs duty) × 19%. Example: goods worth €1,000 CIF with 5% duty → Duty = €50 → VAT base = €1,050 → VAT = €199.50.
Yes, if your business is VAT-registered in Cyprus. Import VAT paid at customs is an input tax credit, recoverable through your periodic VAT return. You will need the customs declaration (C88 form) as proof. Non-registered individuals and businesses cannot reclaim it.
Certain imports are VAT-exempt: goods below €150 from non-EU countries (EU low-value consignment rules), personal effects under Transfer of Residence (TOR) relief, certain medical and humanitarian goods, and goods re-exported within a customs procedure.
Import duty is a trade tariff applied to goods entering the EU from third countries — the rate depends on the HS code and country of origin. Import VAT is a consumption tax applied to almost all goods regardless of type. Both are collected at customs clearance. Unlike import duty, import VAT is recoverable by VAT-registered businesses.
Need Help with Import VAT on a Specific Shipment?
Our licensed customs agents will calculate your total costs — duty and VAT — and handle the full clearance at Limassol Port. Contact us for a fast, transparent, and professional service.