Cyprus non-resident company: VAT to EU customers

[dotpedal]

Hi,

I'm looking at registering a Cyprus non-resident company and manage it from a zero-tax country to benefit from 0% corporate income tax

What is the situation with VAT? Do Cyprus non-resident companies need to charge VAT to their customers? I read on the forum that Cyprus non-resident companies can not register for VAT.

 

[JohnLocke]

dotpedal said:
What is the situation with VAT? Do Cyprus non-resident companies need to charge VAT to their customers?
Click to expand...

In the past it was not possible to register a non-resident Cyprus company for VAT - not sure if anything has changed. I know a Cyprus non resident company that never have charged VAT regardless where it has sold it's services and products to for the last 7 years. No one has ever asked any question.

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[JustAnotherNomad]

Just to be clear, that's illegal. The reason the company can't register for VAT is that it's not tax resident in Cyprus, which makes complete sense - unless it had customers in Cyprus.
But the company would still need to register for VAT in the countries where its customers are, as soon as the VAT thresholds for those countries are exceeded.
But we all know that they struggle to enforce the rules. Lots of dropshippers from Hong Kong never pay VAT. But that doesn't mean it's legal.
http://www.vatfraud.org

 

[dziter]

Not in full link with the subject but close.

I came to Cyprus accountant about a classic non-dom setup (means be tax resident in Cyprus).
Clients are exclusively outside Cyprus and in Europe.

He clearly told me to forget about VAT refunds from Cyprus. Really complicated, can take one year and "seriously don't count on it'.
Did you already hear something like that? Is it common when incorporating in Europe and invoicing other EU customers with VAT?

 

[JustAnotherNomad]

It's not important. If you deliver services, all VAT will be reverse charged. Any refunds you'll ever get would be for stuff you buy, like a PC. Just don't buy it in Cyprus and depending on the circumstances, you won't even have to pay VAT in the first place, you can just buy it at the net price. So there will be no refund even.

 

[Mark Rucken]

You need to switch to a resident CY company if you want to register for VAT and use perks of VAT return. Appoint a local director and you are ready to apply for VAT. Oh yes, you also have to pay profits tax then 🙂

 

[pipona]

Does a Cyprus non-resident company need to pay VAT on buying B2B services from another EU company?

Is that EU service selling company obligated to charge VAT to the Cyprus client if it doesn't have a VAT number (since it's a non-resident company)?