Essential products are getting a zero VAT rate

Cyprus has implemented a 0% VAT policy that will be in effect until December 31, 2025, on a number of essentials. Targeting products including baby formula, adult and baby diapers, feminine hygiene products, and a variety of fruits and vegetables, the effort seeks to lower the cost of essentials for citizens.

According to the Tax Department, the Council of Ministers Decree's list of basic goods is the only category for which this 0% VAT rate is applicable (KDP 349/2024). Both liquid and powdered baby milk, adult and infant nappies, and feminine hygiene items such as tampons, sanitary pads, and incontinence pads are included in this measure.

For fresh or chilled vegetables, the zero VAT rate covers staples such as potatoes, tomatoes, onions, garlic, leeks, cabbages, cauliflower, broccoli, lettuce, carrots, turnips, beetroot, cucumbers, and legumes like peas and beans.

Additionally, a wide variety of fruits are eligible for the tax exemption. This category includes bananas, figs, citrus fruits (oranges, mandarins, clementines, grapefruits, and lemons), as well as grapes, melons, watermelons, apples, pears, apricots, peaches, cherries, nectarines, plums, strawberries, and kiwi.

The exemption is applied according to specific commodity codes, as defined in the decree, to ensure clarity on which fruit and vegetable products qualify. It is anticipated that by reducing the cost of these essentials for customers across the country, this targeted tax reduction will help the economy.