Cyprus extends Zero-VAT relief on essential goods through 2026

Cyprus has extended the 0% VAT rate on essential goods such as baby products, hygiene items, and fresh fruit and vegetables until 31 December 2026 to support households amid the cost-of-living pressures. Retailers must keep these items zero-rated in their systems throughout 2026, while the standard VAT rate remains 19% and other reduced rates continue to apply

The Cypriot government has officially extended the temporary zero-rate Value Added Tax (VAT) on a wide range of essential household items. Originally set to expire at the end of 2025, the tax relief will now remain in place until December 31, 2026.

Shoppers in Cyprus will continue to pay 0% VAT on the following products throughout 2026:

 

·         Baby Care: Infant milk and diapers.

·         Adult Care: Adult diapers.

·         Hygiene: Feminine hygiene products.

·         Fresh Produce: All fresh or chilled (not frozen) vegetables and fresh fruits.

Despite inflation being projected at nearly zero per cent for 2025, the Cabinet approved the Finance Ministry's proposal to keep the measure in effect for another 12 months. The government views this as a targeted social policy to increase the disposable income of citizens who are most affected by the global cost-of-living crisis.

Retailers and suppliers must ensure their accounting systems are updated to maintain the 0% rate for these specific categories through the end of 2026. The standard VAT rate in Cyprus remains at 19%, with other reduced rates of 9%, 5%, and 3% still applicable to various other goods and services.