Zero VAT Rate on Essential Goods Extended Until December 2026

The government has extended the zero rate of value-added tax (VAT) on a range of essential goods in Cyprus until the end of December 2026, Finance Minister Makis Keravnos announced after the Cabinet approved the corresponding proposal from the Ministry of Finance.

The decision concerns the zero VAT rate, which was previously scheduled to expire in December 2025. Eligible items include infant formula, baby and adult diapers, feminine hygiene products, as well as fresh or chilled fruits and vegetables.

According to the minister, maintaining the zero rate on these items reduces the expenses of vulnerable households, increases disposable income, and improves citizens’ standard of living. Keravnos noted that, despite zero inflation in 2025, the measure is aimed at supporting vulnerable groups.

For residents of Cyprus, the extension means that until the end of 2026, VAT will not be charged on these products, potentially lowering the final cost of purchases for low-income families and buyers of socially important goods.