REMINDER: Cyprus raises VAT 1% to 19% on 13th Jan 2014
Cyprus today, 13th January 2014, enacts a second 1% austerity VAT rise, raising the standard VAT rate to 19%. The reduced VAT rate also rises from 8% to 9% today. Cyprus started the financial crisis with a standard VAT rate of 15%, the lowest permitted by the European Union.
Cypriot austerity VAT rises
This increase was announced in 2012 in the midst of a Cyprus financial crisis when the country was at risk of defaulting on its sovereign debt. It proposed raising Cypriot VAT from 17% to 19% in two stages in 2013 and 2014.
Cyprus has already raised its VAT rate during the wider financial crisis. It last increased its VAT rate from 15% to 17% on 1 March 2012. The average EU VAT rate is over 21%.