From 2020 to 2024, Cyprus’s tax authorities collected an impressive €15.3 billion in value-added tax (VAT). According to official data, net revenue during this period amounted to €12.9 billion, while around €2.4 billion was returned to businesses and taxpayers through refunds.
Year by Year: Revenue Growth
According to Cyprus’s Accountant General, Andreas Antoniadis, VAT revenue in 2024 reached €3,661,516,239. By comparison, in 2023 it was €3,493,121,609, in 2022 — €3,000,727,205, in 2021 — €2,525,210,229, and in 2020 — €2,583,763,760.
Net revenue after refunds also showed steady growth: €3,081,517,473 in 2024, €2,958,763,378 in 2023, €2,538,045,040 in 2022, €2,151,149,746 in 2021, and €2,167,648,503 in 2020.
As for VAT refunds, in 2024 alone they amounted to nearly €580 million. In 2023, refunds reached €534.3 million, in 2022 — €462.6 million, in 2021 — €374 million, and in 2020 — €416.1 million. The total sum of refunds over the five-year period reached €2.37 billion.
VAT — Half of State Tax Revenue
According to the Audit Office report, state tax revenue in 2024 amounted to €7.4 billion, compared to €5 billion in 2021. Notably, roughly half of this revenue comes from VAT, making it the key source of budget funding. For comparison: corporate tax and income tax combined contribute a significantly smaller share. This reflects the structure of Cyprus’s economy, where services, tourism, retail trade, and imports play a dominant role.
Who Has to Pay VAT in Cyprus
In Cyprus, VAT is mandatory for everyone engaged in business activity. It applies to the sale of goods, the provision of services within the country, as well as the import of goods from outside the EU.
VAT payers may include private entrepreneurs and self-employed individuals, as well as companies, partnerships, associations, and even non-profit organizations. In 2024, the standard VAT rate is 19%, but reduced rates of 9% and 5% apply to certain goods and services.
Outlook and Trends
Economists note that the rise in VAT revenue reflects the recovery of domestic consumption, as well as the revival of tourism and trade after the pandemic. In 2024, Cyprus recorded a record number of tourist arrivals, which directly boosted sales volumes and, consequently, tax revenues.
In the coming years, authorities plan to strengthen the digitalization of tax administration, introduce more transparent VAT refund mechanisms, and fight tax evasion. These measures are expected to further improve system efficiency and increase the share of the budget generated by indirect taxes.