One of the current priorities for the Cyprus Tax Department is to modernise the administration of the tax system, moving away from a paper-based system to a more streamlined electronic system for submitting returns, and for making payments and refunds, both for direct taxes such as income tax and Special Contribution for Defence, and for VAT.

The department stopped accepting paper VAT returns after 28 April 2017. All returns now have to be submitted electronically via the Taxisnet system, and the VAT liability can be paid via electronic banking, avoiding the need to visit a bank branch.

The Tax Department has now announced that refunds of VAT will also be processed electronically by bank transfer, and that cheques will no longer be issued for refunds. Taxpayers who have applied for a VAT refund are required to provide the Tax Department with details of the account into which the refund should be made using the prescribed form, which is available on the department’s website.