Cyprus VAT Authorities regarding the VIES System

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vat3The Cyprus VAT authorities have announced that they will issue a set of useful guidelines in order to prevent local traders from making unnecessary mistakes when issuing invoices to their EU VAT registered customers. All traders who are VAT-registered in Cyprus must fully comply with the Cyprus VAT Office’s relevant instructions. It was observed in the last months that a significant amount of taxable persons who are registered in Cyprus are submitting VIES Statements containing invalid VAT Registration numbers. It is essential that any VAT registration numbers provided to local traders by EU Traders are validated before issuing any sales invoices. Only if the provided EU VAT registration number is valid can the zero VAT rate be applied to the VAT Invoices. Even when long-term business relationships between Cyprus and EU traders have been developed between Cyprus and other EU traders, it is in the local traders’ best interest to check their clients’ VAT registration numbers as there have been many occasions were EU VAT registration numbers were cancelled and the Cyprus traders were not informed. Moreover, the EU VAT registration numbers must always be validated even when the EU customers supply local traders with VAT Registration certificates issued by other EU Member States on the grounds that, under the VAT Act of some Member States, traders holding a valid VAT number need special permission in order to carry out intra- community transactions. Consequently, the local VAT registration number they are using may not be valid for intra-community transactions if the special permission has not been granted.