Intrastat in Cyprus: Rules, obligations, and consequences

Intrastat is a system for collecting statistical data on the trade of goods between European Union countries. It was introduced in 1993 in connection with the creation of the European single market to monitor the flow of goods between member states. In Cyprus, obligations related to Intrastat declarations are overseen by the tax authorities. Every business that exceeds certain financial thresholds for the supply or acquisition of goods within the European Union is required to submit monthly Intrastat declarations.

Authorities responsible for Intrastat in Cyprus

In Cyprus, the VAT authorities are responsible for receiving Intrastat declarations. Businesses that are required to submit these declarations must contact the relevant tax office based on their business location. Cyprus is divided into several tax districts, with the main VAT offices located in Nicosia, Larnaca, Limassol, Paphos, and Famagusta.

Thresholds for Intrastat declarations

There are two thresholds for Intrastat declarations in Cyprus: simplified and detailed. Businesses that exceed a given threshold are required to submit the appropriate declaration. The thresholds differ depending on whether they apply to the dispatch or receipt of goods.

For the simplified declaration, the threshold is EUR 75,000 for dispatches and EUR 320,000 for receipts. For the detailed declaration, these thresholds are significantly higher: EUR 5.8 million for dispatches and EUR 2.7 million for receipts. Exceeding these thresholds requires submitting more detailed reports on the trade of goods between EU countries.

Reporting periods and deadlines for declarations

Intrastat declarations in Cyprus must be submitted monthly. The deadline for submission is the tenth day of the month following the reporting period. This means that businesses must submit their declarations for a given month by the 10th of the following month. If this date falls on a weekend or public holiday, the declaration can be submitted on the next working day.

Timely and regular submission of declarations is crucial to avoid administrative penalties. Failure to meet the deadlines may result in fines, which will be discussed in detail later in this article.

How to submit declarations

Intrastat declarations in Cyprus must be submitted electronically. Businesses can do this through the Taxisnet online platform, available at http://taxisnet.mof.gov.cy. This system allows for quick and efficient data transmission, which is particularly important for timely compliance with reporting obligations.

Correction of declarations

If a business makes a mistake in a previously submitted declaration, it is required to submit a correction. Corrections can relate to any type of errors, from incorrectly entered amounts to mistakes in product codes. It is important to correct errors as soon as possible, as delays in reporting accurate data may result in penalties.

Zero declaration

If a business that is required to submit Intrastat declarations did not conduct any intra-community transactions in a given month, it must submit a “zero declaration.” This informs the tax authorities that no reportable transactions took place during that period. Submitting a zero declaration is just as important as submitting a standard declaration, as failure to do so may be considered a breach of reporting obligations.

Special cases

Intrastat also covers a number of special cases that require additional reporting or specific reporting methods. An example is the return of goods. If the return exceeds certain thresholds, the business must include it in the monthly declaration using the appropriate code for returned goods.

Another example involves transactions related to consignment sales. In this case, the supplier is required to report these transactions in the Intrastat declaration. If an invoice has been issued, the transaction value is the value stated on the invoice. Otherwise, the value should reflect the market value of the goods.

Another case involves issuing a credit note without an actual return of goods. In such situations, since there is no physical movement of goods, the transaction does not need to be reported in the Intrastat declaration. It is also important to correctly report the movement of own goods between different company locations, which are subject to the same reporting rules as standard sales.

Penalties for non-compliance

In Cyprus, financial penalties are provided for failure to comply with Intrastat obligations. If a declaration is not submitted or contains errors, a fine of EUR 15 may be imposed on the business. If the declaration contains significant omissions or inaccuracies and the business does not inform the VAT commissioner within two months of the end of the reporting period, a penalty of the same amount will also be imposed. Additionally, if the non-compliance continues for more than 30 working days, the business may be fined an additional amount of up to EUR 2,562.

VAT rates in Cyprus

In Cyprus, the standard VAT rate is 19%, which applies to most goods and services. The reduced VAT rates are 9%, 5%, and 0%. The 9% rate covers, among other things, passenger transport and catering services. The 5% rate applies to selected food items, pharmaceutical products, and books. The 0% rate is applicable to international and intra-community transport. Additionally, certain services, such as residential property rentals and medical care, are exempt from VAT.

Summary

Intrastat in Cyprus is a key system for monitoring intra-community trade in goods. Businesses are required to regularly submit declarations if their transactions exceed the established thresholds. This system requires accuracy and timeliness, and penalties are in place for non-compliance. It is important to stay up to date with legal requirements and use available electronic tools to avoid potential issues with the tax authorities.