Cyprus E-Commerce Company: Tax, VAT and Setup Guide

A Cyprus e-commerce company can provide an EU legal base, but it does not make sales automatically Cyprus-taxed or VAT-free. The correct treatment follows the supply chain, customer, goods location, marketplace role, imports, returns and place of management.

Map the transaction before choosing the entity

For each product flow record the seller of record, supplier, dispatch country, importer, customs declarant, warehouse, customer country, marketplace and payment flow. Dropshipping can create VAT registrations and consumer obligations where goods or customers are located even when the company is incorporated in Cyprus.

VAT and customs

Domestic Cyprus supplies generally use the applicable Cyprus rate. Intra-EU B2B supplies require valid evidence and conditions; a VAT number alone is not enough. EU B2C distance sales can use the Union OSS after applying the common threshold and destination rules. Imported consignments may involve IOSS, import VAT, customs value and platform deemed-supplier rules. Exports require evidence; “non-EU customer” does not make every service or goods sale 0%.

Corporate tax and substance

Cyprus's standard corporate rate is 15% from 2026. Tax residence, treaty access and profit attribution depend on genuine management, people, risks, inventory and functions. A nominee director or virtual office cannot cure a business managed elsewhere. Transfer pricing applies to related suppliers, fulfilment, IP and marketing arrangements.

Consumer and platform compliance

Address pre-contract information, pricing, withdrawal and return rights, product safety, privacy, cookies, marketing consent, marketplace terms, payment disputes and producer-responsibility rules. Regulated products need sector-specific approvals. These obligations exist independently of tax.

Operational evidence

Keep supplier and fulfilment contracts, import records, VAT-ID checks, transport evidence, marketplace statements, invoices, refunds, chargebacks, product files and customer-location evidence. Reconcile processor settlements to sales and VAT returns.