Tax & Accounting Blog

Cyprus to Seek EU Approval to Reduce VAT on Electricity

Indirect Tax, ONESOURCE, Sales and Use Tax, Transaction Tax March 22, 2012

The Cyprus Ministry of Finance, in an apparent change of heart, has announced that the government plans to seek approval from the European Union to reduce VAT on domestic electricity use. The current rate is 17% and the government would like to reduce that to 8%. ‘This would reduce electricity bills for consumers by around 10 per cent,” said Commerce Committee chairman Lefteris Christoforou. The EU VAT Committee meets this coming Monday March 26th, so Cyprus has no time to waste if it doesn’t want to wait three months for its next chance to request permission to lower the rate.