The reverse charge mechanism applies when there is acquisition of goods in Cyprus for business purposes from an EU supplier who is a taxable person. By applying this principle, the recipient acts as if it is both the supplier and the customer, it imposes VAT on goods received itself and then, assuming that the acquisition of goods relate to VAT taxable supplies that the recipient supplies, it can claim it back as input VAT with zero balance. In this case the Cypriot buyer must notify its EU supplier of its VAT number so that the EU supplier will not charge the Cypriot buyer VAT upon dispatch of the goods.
When goods are imported in Cyprus from outside the EU, import VAT and customs duties may be due. VAT and duties must be paid or secured before the goods are released from customs' control. Import VAT paid upon importation can be deducted as input VAT subject to the normal recovery rules.