Cyprus Zero VAT on Food Staples: What Is Covered, and Until When
Three Cyprus VAT decrees in October 2026: 0% on meat, bread, milk and coffee to May 2027, fruit and nappies to end-2027, 9% on home solar.
Cyprus has zero-rated a long list of food basics, but under two decrees with different end dates: 31 May 2027 and 31 December 2027. A third decree cuts VAT on home solar systems to 9%. All three date from 30 September to 16 October 2026 and belong to the cost-of-living measures carried into the 2027 budget.
TL;DR: If you shop in Cyprus, the listed basics now carry no VAT. If you sell them, two lists expire on two different dates, and the scope is product by product: processed meat, pastries and ready-made coffee drinks are not zero-rated. Separately, the reduced excise on motor fuel ends at the end of November unless the cabinet renews it.
The three decrees at a glance
| Decree | What | 0% or reduced rate | From | Until |
|---|---|---|---|---|
| K.D.P. 354/2026 | Fresh, chilled or frozen meat and edible offal; fresh, chilled or frozen fish, cuttlefish, squid and octopus | 0% | 1 October 2026 | 31 May 2027 |
| K.D.P. 354/2026 | Bread, milk (including plant-based alternatives), coffee, sugar, baby food | 0% | 12 October 2026 | 31 May 2027 |
| K.D.P. 362/2026 | Baby milk, baby and adult nappies, feminine hygiene products, specified fresh fruit and vegetables | 0% | 1 January 2027 (extension) | 31 December 2027 |
| K.D.P. 363/2026 | Photovoltaic systems supplied to homes for self-consumption | 9% instead of 19% | 16 October 2026 | No end date announced |
The second list is not new: those products were already zero-rated through 2026, and K.D.P. 362/2026 extends that treatment for another year. The first list is temporary and ends earlier.
What is in, and what stays out
The scope follows the decree's product categories. Fresh and frozen bread is covered; pastries are not. Roasted and unroasted coffee beans and ground coffee are covered; takeaway and other ready-made coffee drinks are not. Fresh, condensed and plant-based milk is covered. Fresh, chilled or frozen meat is covered; processed meats such as marinated or smoked meat, sheftalia, nuggets and sausages keep their existing reduced rate. Snacks such as crisps and sweets stay at the regular rate.
If a product sits on the border, the classification in the decree decides, not the shelf it is sold from.
What businesses need to do
- Retailers and wholesalers: check that your till and invoicing systems apply 0% to the right items from the right date, and that they switch back on the right date. Two end dates, 31 May and 31 December 2027, mean two changes to plan for. KPMG notes that each rate change also requires a stock count of the affected goods, quantities and value, on the day before it takes effect (regulation K.D.P. 259/2004).
- Cafés and restaurants: the zero rate covers coffee as a product (beans, ground), not drinks you prepare and serve, and not pastries.
- Solar installers: the 9% rate applies to supplies made from 16 October 2026 to residential customers for self-consumption. According to KPMG, a supplier may apply 9% to a supply made after that date even if payment was received or an invoice issued earlier; a credit note adjusting the VAT is then required. Anything outside those conditions stays at 19%.
Fuel: decision pending
The reduced excise duty on motor fuels is due to expire at the end of November 2026. On 4 November the Minister of Finance said the government would ask the cabinet to renew it, potentially until March 2027. Until the cabinet decides, assume it ends with November.
Where this comes from
The 2027 State Budget, presented to the House Standing Committee on Financial and Budgetary Affairs on 12 October 2026 with a plenary vote due in December, lists the extension of the zero rate to bread, milk, coffee, sugar and infant food among its cost-of-living measures. The decrees themselves were issued by the Council of Ministers in September and October. Our VAT return guide covers how rate changes show up on the return.
This is general information, not tax advice. For a specific product, check the decree's product list or ask your accountant.
Sources
- Ministry of Finance: the 2027 State Budget presented to the Standing Committee on Financial and Budgetary Affairs (12 October 2026)
- KPMG Cyprus: Application of the zero VAT rate to specified goods until 31 May 2027 (K.D.P. 354/2026)
- Cyprus Mail: Zero VAT extended to food staples (2 October 2026)
- VATupdate: Cyprus introduces temporary zero VAT rate for additional essential goods (K.D.P. 354/2026)
- Sovos: Cyprus extends zero VAT rate on essential goods through 2027 (K.D.P. 362/2026)
- KPMG Cyprus: Photovoltaic systems, application of the reduced VAT rate of 9% (K.D.P. 363/2026)
- Cyprus Mail: Cyprus seeks extension of fuel tax cuts until March 2027 (4 November 2026)