rocket
Orbitax subscribers can now easily follow the latest COVID-19-related tax measures being implemented worldwide. New to Orbitax? Create a free account to access your dashboard and latest tax news.
News Share

The Tax Hub

Daily Tax Newsletter

Cyprus

15 October 2020

Responsive image

Cyprus Tax Department Issues Implementing Directive on Reverse Charge for Certain High-Value Goods

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:

  • Mobile phones;
  • Integrated circuit mechanisms, such as microprocessors, and central processing units; and
  • Game consoles, computer tablets, and laptops.

In particular, Implementing Directive 01/2020 clarifies the type of goods subject to reverse charge as follows:

Mobile phones

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:

  • Mobile phones provided with accessories (such as charger, battery, cover, or hands-free kit) as a single package (one price);
  • Prepaid (or "pay as you go") mobile phones; and
  • Smartwatches with a mobile phone function that is not connected to a mobile phone.

The reverse charge does not cover:

  • Mobile phones provided with a contract for talk time;
  • Mobile phone accessories supplied separately from a mobile phone
  • Walkie talkies;
  • Wi-Fi phones, unless also intended for use with mobile networks telephony;
  • Phones where the base unit is connected to a landline, but the handset is not connected to the base unit; and
  • Smartwatches with or without mobile phone function that must be paired with a mobile phone and 3G data cards and Wi-Fi cards.

Integrated circuit mechanisms, such as microprocessors, and central processing units

This category covers integrated circuit mechanisms such as:

  • Small integrated circuits (e.g., central processing units or CPUs);
  • Separate integrated circuit devices, e.g., microprocessors or microprocessor units (MPUs) and microcontrollers or microcontroller units (MCUs) and chipsets, a special set of integrated circuits that support MPUs; and
  • General items prior to their integration into end-user products or where they are sold separately and not as part of an assembled item, for example, a motherboard.

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.

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Translate Documents

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More