15 October 2020
The Cyprus Tax Department has announced the issuance of Implementing Directive 01/2020 of 29 September 2020 for the new Article 11E of the VAT Law. Article 11E was introduced through amendments published 20 August 2020, and provides that where persons registered for VAT acquire the following types of high-value goods for business purposes, they must apply the reverse charge:
In particular, Implementing Directive 01/2020 clarifies the type of goods subject to reverse charge as follows:
Mobile phone means any device that has a mobile phone function (i.e., sending and receiving voice messages via a mobile network), regardless of whether the device has other functions, including smartphones and hybrid phone/tablets (phablets).
The reverse charge also covers:
The reverse charge does not cover:
Integrated circuit mechanisms, such as microprocessors, and central processing units
This category covers integrated circuit mechanisms such as:
This category does not, in any case, include desktops, cash register systems, or peripherals such as printers, external memory cards, chargers, etc.
Game consoles, computer tablets, and laptops
This category includes gaming consoles, laptops, and all tablets that can operate autonomously with an internet connection, even if they have other uses, such as connecting to ordering systems. This category does not include other devices that cannot function autonomously, even if they look like tablets.
Implementing Directive 01/2020 further notes that the obligation for the buyer to apply the revers change applies regardless of whether the supplier is registered for VAT (a (taxable person). It is also provided that when a supplier issues a VAT invoice to which the provisions of article 11E apply, the supplier has the obligation to confirm that the VAT number submitted by the customer is valid. VAT numbers can be validated on the VIES VAT number validation website.
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