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On payment of excise duties and VAT
1. Community status of the Vehicle
Goods in free circulation in the EU move from one member state to another without payment of further Customs import duty. To be exempt from paying further import duty in Cyprus, proof of Community status of the goods must be provided. If you are transferring to Cyprus a car for private use from another member state, you may prove its Community status by producing:-
for a brand new or used vehicle, T2L or Τ2LF document; or
for used vehicles, the number plates and the vehicle registration document issued by previous member state.
The T2L or Τ2LF document can be obtained from the previous member state Customs Service or through your vehicle supplier of the shipper.
In case of failure to provide above mentioned proof of vehicle’s Community status, the importation will be classed as having arrived from a third country and the vehicle will be liable to import duty in addition to the excise duty and VAT.
2. Procedure on arrival of the vehicle in the Republic
Certain goods are subject to excise duty, even if they arrive from another member state of the EU. Motor vehicles, in the following categories, are subject to excise duty :
- saloon type vehicles;
- Jeep-type off-road vehicles (4Χ4);
- double cabin cars;
- vans of tariff heading 87.04 having a gross weight not exceeding 2032 kg and a net cargo space not exceeding 2 m3;
- motorcycles having an engine of a cubic capacity exceeding 100 cc.
If your vehicle is brought in unaccompanied by ship, you are required to furnish proof of Community status before you are allowed to remove the vehicle from the port.
However, in both cases, you are required to declare the vehicle to the nearest Customs Station within 24 hours from the date of its arrival using form ED5 (in both Greek and English), in order to pay the excise duty and VAT, if the latter is payable. If a public holiday or weekend follows the date of arrival, you must make the declaration on the first working day after the expiration of the 24 hours deadline.
3. Payment of excise duty
3.1. Calculation of excise duty
You must pay the excise duty due within 10 working days from the date of the vehicle’s arrival in the Republic, unless within this period you opt to:
- place it in a customs warehouse
- send it to another member state of the EU
- export it to a third country.
The excise duty on motorcycles an engine capacity exceeding 100 cc, is 30% on their value. The liability to excise duty for remainder of the vehicles is calculated on the basis of the capacity of the vehicle’s engine and this is differentiated according to: -
- the age of the vehicle at the time of its arrival
- the mass of carbon dioxide (CO2) emissions.
3.2. Differentiations because of the carbon dioxide
The excise duty for category A is differentiated according to the mass of carbon dioxide (CO2) emissions in a combined cycle, as follows:
it is reduced by 15%, if the mass of carbon dioxide emissions in a combined cycle is equal or less than 150 grams per kilometer (gr/km)
it is increased by 10%, if the mass of carbon dioxide emissions in a combined cycle is greater than 275 gr/km.
This reduction is granted or increase is imposed in accordance with the level of carbon dioxide certified by a certificate issued by the Inland Transport Department (Main Offices in Nicosia).
The increase of 10% shall be imposed on vehicles having an engine capacity exceeding 2250 cc, if a certificate from the Inland Transport Department showing a level of carbon dioxide less than 275 gr/km is not produced.
The certificate for the mass of carbon dioxide for customs purposes is issued on the basis of particulars shown on the Certificate of Conformity, which must accompany every vehicle for registration or on a certificate issued by the vehicle type approval authority of the member state of the European Union.
If a vehicle is not accompanied by a Certificate of Conformity, it is practically difficult to prove the level of the mass of carbon dioxide emissions, because the only evidence acceptable by legislation is the Certificate of Conformity or a copy of the approval of vehicle type.
For the issue of the certificate, you may apply to the Main Offices of the Inland Transport Department to the following address:
Kameris Court 1
Vasileos Pavlou 17, Nicosia
Tel. Nos: 22807121 & 22807107
Fax: 22354030
E-mail: dirdrt@cytanet.com.cy
3.3. Differentiations because of the vehicle’s age
A vehicle is considered as used if it has done more than 6000 km and at the date of its transfer to Cyprus is more than 6 months old, calculated from the date of its registration for the first time in any country.
An amount of 15% of the excise duty due is deducted, if the vehicle is less than one year old at the time of its transfer to Cyprus.
A total amount of 20% of the excise duty due is deducted if the vehicle is between one and three years old at the time of its transfer to Cyprus.
An additional amount of 25% of the excise duty due is imposed, if the vehicle is more than 5 years old at the time of its transfer to Cyprus. This additional amount is not payable in the case of vehicles imported by permanent residents abroad, who take up permanent residence in Cyprus and which at the time of their transfer to Cyprus were registered in their name.
3.4. Transitional provisions
For the vehicles mentioned below, the excise duty will be calculated either on the basis of the customs provisions applicable until 23 November 2003, i.e. on the basis of their value, or on the basis of the cubic capacity of their engine and the lesser of the two amounts will be payable:
For brand new off-road vehicles (4X4), which had been imported and were not cleared until 24 November 2003. This transitional period will apply until 23 November 2004.
For used vehicles, which had been imported and were not cleared until 24 November 2003, or used vehicles which have been imported by 31 December 2003, as long as the Director of Customs is satisfied that their shipment had been arranged before 24 November 2003, or have been imported by 10 January 2004 but their delayed arrival is not due to acts or omissions of the importer.
For vehicles which have been cleared duty free or partly duty free or for which a reduction in duty payment has been granted in the form of drawback of duties, or which are under the temporary importation regime. This transitional period will apply until 31 December 2004.
For vehicles, which until 24 November 2003 were cleared under another tariff heading and as a result of modifications made on them, they are classified under tariff heading 8703, under which saloon cars are classified (e.g. a van is converted into a saloon car).
Whereas you can calculate the excise duty payable according to the legislation in force now, you cannot calculate the excise duty payable on the basis of the customs provisions applicable before 23 November 2003, because this calculation is based on the vehicle’s historic value, which is not available to the public. This calculation is done by Customs only.
Used vehicles, acquired under the general terms of taxation applicable in the member state from which they were transferred and VAT has not been relieved or has not been refunded, are not liable to VAT.
Brand new vehicles, which at the time of their arrival in the Republic have no number plates of another member state, are liable to VAT in addition to the excise duty payable. The value for VAT calculation is the sum of the purchase price plus the transportation costs and insurance up to the point of entry in the Republic plus the excise duty.
On collection of the excise duty and VAT (if the latter is payable), the Customs will issue Form C.72A. The vehicle must be then produced, together with Form C72A and other documents relating to your vehicle, to the Inland Transport Department for inspection and registration purposes.
3.5. Examples how to calculate excise duty
The following examples will help you to understand better how excise duty on vehicles is calculated. In all examples it is assumed that the importer has proved the Community status of the vehicles.
Example 1:
A used saloon vehicle is 9 months old at the time of its transfer to Cyprus from the United Kingdom on the 15 May 2004. The cubic capacity of its engine is 1789 cc and the carbon dioxide emissions are 180 gr/km.
The excise duty payable is calculated as follows:
1789 Χ £2,70= £4.830
This amount is reduced by 15% because of its age, i.e.:
£4.830 – (£4.830 Χ 15%) = £4106
Additional excise duty 1789 Χ £0,01 = £18
Total excise duty payable £4.106 + £18 = £4.124
Example 2:
A used saloon vehicle is 6 years old at the time of its transfer in Cyprus from the Germany on 2 June 2004. The cubic capacity of its engine is 2499 cc.
The excise duty payable is calculated as follows:
2499 Χ £5,50= £13.745
No certificate for the carbon dioxide emissions has been produced and therefore the excise duty is increased by 10%, i.e. (£13.745 Χ 10%) = £1.375.
This amount is increased by 25% because of its age, i.e.:
{(£13.745+1375) Χ 25%} = £3.780
Additional excise duty 2499 Χ £0,01 = £25.
Total excise duty payable: £13.745 + £1.375 + £3.780 + £25 = £18.925
Example 3:
A brand new van having an engine cubic capacity of 2150 cc was purchased from France for £5.000. The transportation cost to Cyprus and the relevant insurance during the voyage was £500.
The excise duty payable is calculated as follows:
2150 Χ £0,75= £1.613
Additional excise duty 2150 Χ £0,01 = £29.
Total excise duty payable: £1.613+ £22 = £1.635.
VAT is also payable on this van, which is calculated as follows:
(Purchase price + transportation costs and insurance + excise duty) X 15% = (£5.000 + £500 + £1.635) Χ 15% = £920.