How it works in the return
When the reverse charge applies, the supplier invoices without Cyprus VAT. You calculate the VAT yourself at the Cyprus rate and show it twice: as VAT due in Box 1 (or Box 2 for EU goods), and as VAT you can claim in Box 4.
If you can claim all the VAT, the two amounts cancel out. If you cannot, for example because part of your business is exempt, you pay the difference.
Services from abroad (Article 11)
Most business-to-business services bought from a supplier outside Cyprus, such as software subscriptions, advertising and consultancy, fall under the reverse charge. The value goes in Box 7, and for services from other EU countries also in Box 11B.
Goods from other EU countries
Goods bought from a VAT-registered supplier in another EU country are an acquisition. You declare the VAT in Box 2, claim it in Box 4, and show the value in Boxes 7 and 11A.
Domestic reverse charge
| Article | Covers |
|---|---|
| 11B | Construction services between VAT-registered businesses in Cyprus. |
| 11C | Supplies of scrap metal. |
| 11D and 11E | Certain goods prone to VAT fraud, such as mobile phones, integrated circuits and gold. |
For these supplies within Cyprus, the supplier issues an invoice without VAT and states that the reverse charge applies, and the buyer accounts for the VAT.
Common mistakes
- Recording a foreign subscription as a plain expense, so the VAT never appears in Boxes 1 and 4.
- Showing the VAT due but forgetting to claim it, or the other way round.
- Paying VAT to a Cyprus subcontractor on construction services that fall under Article 11B.
- Leaving the value of EU services out of Box 11B.
How DecaBooks helps
DecaBooks recognises bills that fall under the reverse charge, such as foreign software subscriptions, and posts the VAT to both sides of the return automatically, in the right boxes.
This guide is general information, checked against official sources in October 2026. It is not tax advice. Rules change, so confirm with the Tax Department or your adviser before you act.
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