Cyprus zero VAT on food: meat and fish from 1 October, bread, milk, coffee and sugar from 12 October

From 1 October 2026 Cyprus applies 0% VAT to fresh, chilled and frozen meat and fish. From 12 October the zero rate extends to bread, milk, coffee, sugar and children’s food. Both run to 31 May 2027 under Decree K.D.P. 354/2026. Processed products such as sausages, smoked fish and bakery items stay at the reduced 5% rate.

What did the Tax Department announce on 2 October 2026?

On 2 October the Tax Department confirmed that Decree K.D.P. 354/2026, published in the Official Gazette on 30 September 2026, amends the VAT Law to zero-rate a list of basic foods. The decree follows a Council of Ministers decision.

It works in two tranches, both ending on 31 May 2027:

Which meat and fish are zero-rated from 1 October?

The announcement lists them by Combined Nomenclature code, which is what your system should be matched against:

• Beef (CN 0201, 0202)
• Pork (CN 0203)
• Sheep and goat meat (CN 0204)
• Edible offal of cattle, pigs, sheep and goats (CN ex 0206)
• Poultry meat and edible offal (CN 0207)
• Rabbit and hare meat and edible offal (CN ex 0208)
• Fish (CN 0302, 0303, 0304)
• Cuttlefish, squid and octopus (CN ex 0307)

Only fresh, chilled (simple chilling) or frozen product qualifies.

The Tax Department states in terms that prepared products stay at the 5% reduced rate. For meat that means marinated, smoked, wine-cured and flavoured products, sheftalia, burgers, chicken nuggets, sausages, loukanika, lountza, roasts, gyros and breaded products. For fish it means canned, smoked, marinated and breaded fish.

For meat and fish this is a continuation, not a new rate: a zero rate on meat, poultry and fish ran from April 2026 to 30 September 2026.

Which products are zero-rated from 12 October?

Five categories, each with an exclusion that matters at the till:

• Bread. All fresh or frozen bread, with or without sourdough: white, brown, wholemeal, multigrain, village, rye, corn bread, baguette, ciabatta, sliced bread, rolls and pitta. Not included: bakery products (pastries), dried bread, and any bread with added ingredients such as raisins, nuts or flavourings.
• Milk. Fresh cow, goat and sheep milk, condensed and concentrated milk, long-life milk, flavoured milk (chocolate, banana) and plant milk (almond, soya, rice).
• Coffee. Unroasted, roasted beans, ground, powder and instant, flavoured, with or without caffeine, in any packaging. Not included: ready-to-drink coffee beverages, hot or cold.
• Sugar. Crystalline (white, brown, dark), caster and icing, coarse, cubes and sachets.
• Children’s food. Powder, dry and liquid food intended for children. Not included: snacks such as crisps, nuts, sweets, chocolate, ice cream and small yoghurts.

What stays at 5%?

Anything on the “not included” lines above, and the processed meat and fish named earlier. The zero rate is deliberately narrow: it follows the raw or basic product, not the finished one. The practical risk for a business is the product on the shelf that looks like it belongs and does not: a seeded loaf, a bottled iced coffee, a snack bar sold for children.

Zero-rated is not exempt: what that means for your VAT return

Zero-rated and exempt are different. A zero-rated supply is a taxable supply at a rate of 0%: it goes on the VAT return, and the business can still recover the VAT on its costs. An exempt supply is outside the tax, and VAT on related costs is generally not recoverable.

For a retailer or wholesaler this has one practical effect: a VAT return that previously showed output VAT on these lines will show the same sales at 0%, with input VAT on stock, rent and equipment still claimed. Cash flow on those lines moves from “collect VAT and pay it over” to “pay VAT on purchases and reclaim it”. The Tax Department announcement does not address refund timing.

What should a business do now?

Six checks, in this order.

1. Check what you charged from 1 October. If you sell meat or fish, the rate has applied since 1 October. Review invoices and till data from that date and fix any line still carrying VAT.
2. Map your products to the CN codes. The lists above are by code. A butcher, fishmonger or wholesaler should check each stock line against them. Prepared lines stay at 5%.
3. Split mixed categories before 12 October. Plain bread against bakery and bread with additives, bottled coffee against beans, children’s food against snacks. These are separate lines in the system.
4. Update POS, invoicing and e-commerce settings with the effective dates: 1 October for meat and fish, 12 October for the second tranche, and an end date of 31 May 2027.
5. Decide your price position. The decree changes the tax, not the price. Whether a business passes the saving on is a commercial decision that the announcement does not make for you.
6. Diarise 31 May 2027. The zero rate is temporary. Contracts, price lists and system settings that assume it should have an end date in them.

Our accounting and VAT team can help with the product mapping and the system settings.

How does this fit with the other zero-rated goods?

The zero rate on fresh fruit and vegetables, baby milk, diapers and women’s hygiene products, introduced by Decree R.A.A. 337/2025, runs to 31 December 2026. It is a separate decree with a separate end date, so the VAT system now carries two different end dates: 31 December 2026 for that list, 31 May 2027 for this one.

Sorting products by decree and end date, rather than by “zero-rated”, is what keeps a system correct when the first date arrives.

The short version

Decree K.D.P. 354/2026 zero-rates fresh, chilled and frozen meat and fish from 1 October 2026 and bread, milk, coffee, sugar and children’s food from 12 October 2026. Both end on 31 May 2027. Processed and prepared versions stay at 5%. Check your product codes, split your mixed lines before 12 October, and set an end date for 31 May 2027.