V.A.T. is imposed on all imported commodities whether the importer is a person liable to V.A.T. or not. Οn importation, it is considered as an import duty and it is charged and paid at the time at which the import duty is paid according to the customs legislation. The customs legislation is applied to imported goods for V.A.T. purposes, with the exceptions and amendments provided by the V.A.T. legislation.
V.A.T. paid on importation is considered to be an input tax for persons liable to V.A.T.
Standard rate of V.A.T.
In general all importations, with few exemptions provided by the V.A.T. and customs legislations, are subjected to the standard rate of duty, which is 15%.
Reduced rate of V.A.T.
All imported goods listed in Annex V to the V.A.T. Law 95(I)/2000 are subject to reduced rate of V.A.T. which is 5%, provided that the prerequisites mentioned there apply. Here are some examples:
- fertilizers, insecticides, rodenticides, fungicides, herbicides, disinfectants, etc;
- animal feeding stuffs, food for birds and fish;
- additives for animal feeding stuffs;
- seeds and items for preparation of foodstuffs and animal feeding stuffs;
- live animals used in the preparation of foodstuffs.
Zero rate of V.A.T.
All imported goods listed in Annex VI to the V.A.T. Law 95(I)/2000 are subject to zero V.A.T. rate, provided that the prerequisites mentioned therein apply. Some examples are:
- foodstuffs for human consumption;
- medicaments classified as such according to customs legislation;
- newspapers, magazine, etc
- clothing and footwear for children;
- hearing aids;
- human and veterinary vaccines;
- invalid wheelchairs.
All imports of goods mentioned in Annex VII to the V.A.T. Law 95(I)/2000 are exempted from payment of V.A.T. Here are some examples:
- dental prostheses supplied by dentists and dental technicians;
- human organs, blood and human milk;
- the supply at face value of postage stamps.
Value of imported goods for V.A.T. purposes
The taxable value for V.A.T. includes:
- the customs value of imported goods, as defined by customs legislation; and
- all duties, taxes or other levies collected on importation.
The case where imported goods are delivered before their clearance for home use is an exception to this rule. This is for example the case whereby goods are sold by the importer to another person while they are in temporary storage or in a customs warehouse. The taxable value in such a case is the value of delivery (i.e. sale), provided it is not lower than the customs value. If the goods are sold under such conditions more than once, the taxable value shall be taken to be the sale price to the last buyer, who will place the goods in free circulation.