On 2 March 2021, the Cyprus Tax Tribunal issued its Decision in the long-anticipated banking case on the value-added tax (VAT) treatment of payment systems services. The taxpayer was represented by EY Cyprus.
In its comprehensive Decision, the Tax Tribunal held that payment systems services (VISA, AMEX, MasterCard) constitute a single supply, which fulfills the specific and essential characteristics of the transfer of money and is therefore VAT exempt.
The Tax Tribunal conclusions nullified the specific VAT assessment. Affected businesses should consider the implications of this judgment on their operations.
Source EY
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