- SME Scheme Overview: Small and medium enterprises (SMEs) in Cyprus can opt for the SME scheme, which exempts them from certain VAT obligations, such as submitting periodic VAT returns, issuing invoices, and maintaining detailed accounts, provided they do not exceed the national annual threshold of €15,600.
- Exclusions and Cross-Border Application: Transactions such as occasional supplies of buildings and exempt cross-border transport supplies are excluded from the SME scheme. For SMEs aiming to operate in other EU Member States, a cross-border SME scheme allows them to notify through the Cyprus SME-SS platform instead of registering separately in each country, and they must submit a single quarterly report.
- Compliance and Appeals Process: Non-compliant SMEs will lose their simplified obligations and must register for VAT in Cyprus. Appeals regarding the SME scheme can be directed to either the Member State of establishment or the Member State of exemption, depending on the nature of the issue, such as turnover or exclusion from the scheme.
Source ec.europa.eu
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