12003TN07/07

7. TAXATION

1. 31977 L 0388: Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ L 145, 13.6.1977, p. 1), as last amended by:

- 32002 L 0038: Council Directive 2002/38/EC of 7.5.2002 (OJ L 128, 15.5.2002, p. 41).

By way of derogation from Article 12(3)(a) of Directive 77/388/EEC, Cyprus may maintain an exemption with refund of tax paid at the preceding stage on the supply of pharmaceuticals and foodstuffs for human consumption, with the exception of ice cream, ice lollies, frozen yoghurt, water ice and similar products and savoury food products (potato crisps/sticks, puffs and similar products packaged for human consumption without further preparation), until 31 December 2007.

By way of derogation from Article 12(3)(a) of Directive 77/388/EEC, Cyprus may maintain a reduced rate of value added tax of not less than 5 % on the supply of restaurant services until 31 December 2007 or until the end of the transitional period referred to in Article 28l of the Directive, whichever is the earlier.

Without prejudice to the procedure set out in Article 27 of Directive 77/388/EEC, Cyprus may continue to apply a simplified procedure on value added tax for the application of a cash accounting scheme and on the value of supplies between connected persons until one year after the date of accession.

For the purposes of applying Article 28(3)(b) of Directive 77/388/EEC, Cyprus may exempt from value added tax the supply of building land referred to in point 16 of Annex F of the Directive until 31 December 2007.

Such an exemption shall not have any effect on own resources for which the basis of assessment will have to be re-established in accordance with Council Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax [2].

For the purposes of applying Article 28(3)(b) of Directive 77/388/EEC, Cyprus may maintain an exemption from value added tax on international transport of passengers, referred to in point 17 of Annex F to the Directive, until the condition set out in Article 28(4) of the Directive is fulfilled or for as long as the same exemption is applied by any of the present Member States, whichever is the earlier.

2. 31992 L 0081: Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils (OJ L 316, 31.10.1992, p. 12), as last amended by:

- 31994 L 0074: Council Directive 94/74/EC of 22.12.1994 (OJ L 365, 31.12.1994, p. 46).

Without prejudice to a formal decision to be adopted according to the procedure set out in Article 8(4) of Directive 92/81/EEC, Cyprus may apply an exemption from excise duties on mineral oils used for the production of cement until one year after the date of accession.

Without prejudice to a formal decision to be adopted according to the procedure set out in Article 8(4) of Directive 92/81/EEC, Cyprus may also apply an exemption from additional excise duties on all types of fuel used for local passenger transport until one year after the date of accession.

[2] OJ L 155, 7.6.1989, p. 9. Regulation as amended by Regulation (EC, Euratom) No 1026/1999 (OJ L 126, 20.5.1999, p. 1).

--------------------------------------------------