Cyprus government announces new VAT relief measures for essential goods

The government of Cyprus has introduced a series of tax relief measures to address rising inflation, implementing a zero VAT rate on a range of essential goods. The initiative, which carries a total budget of 70 million euros, was detailed following a decision by the Council of Ministers and a subsequent announcement by the Tax Department.

As of October 1, 2026, a zero VAT rate applies to various types of fresh, chilled, or frozen meats, including beef, pork, poultry, and lamb. Starting October 12, 2026, this measure will be extended to include bread, milk, baby food, coffee, and sugar. According to government documentation, these relief measures are scheduled to remain in effect through May 31, 2027.

Industry representatives, including the Pancyprian Retail Association and the Consumers' Association, have welcomed the intervention. While stakeholders note that the measure provides immediate relief, they emphasize that it is not a standalone solution to broader price increases. Retailers are currently adjusting their systems to reflect these changes, though some clarifications from the Tax Department are still pending regarding the specific classification of certain bread and dairy products.