Cyprus implements zero VAT rate on essential food items

The Republic of Cyprus has introduced a zero percent VAT rate on a range of essential food products, following a decision by the Council of Ministers and an order published in the Official Gazette (K.D.P. 354/2026). The measure is being implemented in two phases and will remain in effect until May 31, 2027.

Since October 1, 2026, the zero VAT rate has applied to fresh, chilled, and frozen meats. Starting October 12, 2026, the list of items subject to the zero rate expands to include bread, milk, baby food, coffee, and sugar. The Tax Department clarified that certain processed items, such as marinated or smoked meats, sausages, burgers, and tinned fish, will continue to be taxed at the reduced VAT rate of 5% rather than zero.

This initiative aims to alleviate cost-of-living pressures for consumers by lowering the tax burden on basic goods. The government’s decision amends the existing Value Added Tax Law to provide temporary relief to households. There are no indications of further changes to this tax policy beyond the May 2027 expiration date at this time.