Increase of Standard and Reduced VAT Rates
As from 13 January 2014, the standard and reduced VAT rates in Cyprus will increase from 18% to 19% and from 8% to 9% respectively. Any goods or services falling within the reduced VAT rates of 5% and 0% will remain unaffected by the announced increases.

Stock counts
Taxable (physical and legal) persons who hold inventories affected by the changes in the VAT rates need to perform a physical stock count by the close of business on 12 January 2014. In cases where the taxable person is using an electronic stock taking system, a physical stock take is not mandatory. The final stock take report should be kept as part of the business records for a period of 6 years.

Credit Notes
In cases where credit notes issued after 13 January 2014 relate to adjustment of invoices which were initially issued before 13 January 2014, the rate to be applied is the VAT rate which was applicable at the time of supply of the goods or services. If a VAT invoice was issued before the supply of goods or services, the VAT rate that was applicable at the time of issuing the invoice should be applied.

Contracts
Where contracts or agreements have been in effect prior to 13 January 2014 and continue after the increase of the standard rate, only supplies of goods or services made after the effective date will be subject to the increased standard VAT rate of 19%. However, if a payment is received after the increase of the standard rate and that payment is in connection to services or goods provided or supplied prior to the effective date, the applicable VAT rate is 18%.

General
The taxable persons should take into account the relevant tax point in order to timely account for output VAT with regards to the supply of goods or services. The relevant tax points are summarized below:

With regards to goods, it is the earliest of:

1. Date of delivery of the goods
2. Date of issue of an invoice
3. Date of receiving a payment

With regards to single supply of services, it is the earliest of:

1. Date of completion of the services
2. Date of issue of an invoice
3. Date of receiving a payment

With regards to continuous supply of services, it is the earliest of:

1. Date of issue of an invoice
2. Date of receiving a payment

Social Insurance Contribution
The Social Insurance Contribution which is calculated on the daily rate or the basic salary of an employee will be increased by 1% from 1/1/2014. More specifically, the contribution for both parties, the employer and the employee, will be increased from 6.8% to 7.8%. The percentage will be increased by 0.5% every five years.
For the self- employed persons the contribution will be increased from 12.6% to 14.6% for the years 2014 – 2018.

Delays in Social Insurance Contribution Payments
There will not be any penalties imposed for delayed payments towards the Social Insurance Department relating to 2013 contributions. The exemption will be valid for payments made up to 31 December 2013.

Special Contribution Rates
From 1 January 2014 the Special Contribution rates for employees, self – employed persons or pensioners are revised as shown below:
From €0 to €1500 the rate will be 0%
From €1501 to €2500 the rate will be 2.5%
From €2501 to €3500 the rate will be 3%
From €3501 to €4500 the rate will be 3.5%
From €4501 and above the rate will be 3.5%
The special contribution rate should be paid 50% from the employer and 50% from the employee in cases of employed individuals.