Cyprus to zero VAT on bread, milk, coffee, sugar and baby food from 12 October

From 1 October, a zero VAT rate applies in Cyprus to fresh and frozen meat, and from 12 October it will also apply to bread, milk, coffee, sugar and baby food. The tax relief will remain in force until 31 May 2027, the Tax Department said.

The relevant decree was published in the Official Gazette and amends the VAT law following a decision by the Council of Ministers. The zero rate is part of a package of measures to tackle the rising cost of living, approved by the government at the end of September and estimated to cost €70 million in total.

Beef, pork, lamb and goat meat, offal, poultry, rabbit and hare are already covered by the zero rate. Processed meat products—marinated and smoked meat, sheftalia, nuggets, sausages and ready meals—remain subject to the reduced 5% rate, as does fish.

From 12 October, all fresh and frozen bread without additives will be sold VAT-free. Baked goods, rusks and bread containing raisins, nuts or spices are not included. Among dairy products, the tax relief will apply to fresh cow’s, goat’s and sheep’s milk, condensed milk, long-life milk and flavoured milk, such as chocolate or banana, as well as plant-based milk, including almond, soy and rice milk.

The zero rate will also apply to coffee: unroasted, whole-bean roasted, ground, instant and flavoured coffee, with or without caffeine. Ready-to-drink beverages, including takeaway coffee, will remain subject to the standard rate. Sugar will be exempt from VAT in all forms—white, brown and dark granulated sugar, icing sugar, sugar cubes and individual sachets.

For baby food, the tax relief applies to powdered and liquid formula. Baby snacks, sweets, chocolate and ice cream will remain subject to VAT.