Cyprus extends zero VAT rate on essential goods through 2027

The Cyprus Department of Taxation has announced the extension of the zero Value Added Tax (VAT) rate on a specific range of essential goods for the entire calendar year 2027. This decision, formalized in a Council of Ministers decree dated October 16, 2026, aims to continue providing relief to consumers by maintaining the existing tax exemptions from January 1 to December 31, 2027.

The policy covers a broad list of products, primarily focusing on baby supplies and personal hygiene. The items included are liquid and powdered baby milk, diapers for infants and adults (including incontinence pads), and women's sanitary protection products such as tampons and sanitary towels. Furthermore, the zero VAT rate applies to a wide variety of fresh or refrigerated vegetables, including potatoes, tomatoes, onions, cucumbers, and leafy greens, as well as fresh fruits.

This measure represents a continuation of existing efforts to mitigate the cost of living by excluding essential daily necessities from the standard VAT application. By maintaining these exemptions for an additional 12 months, the government seeks to ensure price stability for households purchasing these specific consumer staples.