Cyprus extends zero vat on essential goods until December 2026
Cyprus has extended the zero VAT rate on essential goods — including baby milk, diapers, women’s hygiene products, fresh fruits and vegetables — until 31 December 2026.
Written by Robert LondonAudit & Accounting Lead · ACA (ICAEW) · ICPAC practising certificate
The Council of Ministers has approved the extension of the temporary zero (0%) VAT rate on a selected list of basic goods until 31 December 2026 through Decree R.A.A. 337/2025, published in the Official Government Gazette on 21 November 2025. This measure builds on earlier VAT relief initiatives and aims to reduce the cost of essential products for households in Cyprus.
Products Covered by the 0% VAT Rate
Under the extended scheme, the following goods remain subject to zero VAT:
- Infant and hygiene products.
- Infant milk (liquid or powdered).
- Baby diapers.
- Adult diapers.
- Feminine hygiene protection products (e.g., sanitary pads, tampons).
Fresh or chilled vegetables — including (but not limited to):
- Potatoes, tomatoes, onions, garlic, leeks, cabbages, broccoli, lettuce, carrots, cucumbers, legumes and other edible varieties.
Fresh fruits such as:
- Bananas, figs, avocados, citrus fruits, grapes, melons, apples, pears, apricots, peaches, cherries, nectarines, plums, strawberries, and kiwifruit.
This extension replaces the earlier temporary 0% VAT arrangement that was scheduled to expire at the end of 2025.
Why the extension matters?
- Supports vulnerable households by keeping the cost of essential items low.
- Helping to maintain disposable income.
- Improve overall standards of living.
The government emphasizes that although inflation is projected to remain low into 2025 and 2026, maintaining price relief on selected goods continues to serve social policy objectives.
What businesses should do next?
- Review your VAT systems to ensure the zero VAT rate is applied correctly on eligible products.
- Update pricing and billing software, particularly for retail and wholesale suppliers of covered goods.
- Confirm Classification Codes (CN codes) with the Tax Department to ensure the right products qualify under 0% VAT.
- Monitor any future Tax Department guidance or clarifications relating to Decree R.A.A. 337/2025 and product classifications.
Feel free to reach out to us if you have any questions regarding the above or any query that you may have for your business.
This article is general information on Cyprus tax rules, not advice on your position. The right answer depends on your structure, your residency and the type of income, so treat it as the start of a conversation rather than the end of one.
