European Foundation
for the Improvement of
Living and Working Conditions

The tripartite EU agency providing knowledge to assist
in the development of better social, employment and
work-related policies

EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure CY-2023-18/3178 Updated – measures in Cyprus

Zero VAT rate for essential goods

Εφαρμογή μηδενικού συντελεστή Φ.Π.Α. σε βασικά είδη

Country Cyprus , applies nationwide
Time period Temporary, 02 May 2023 – 31 May 2024
Context War in Ukraine, Cost of Living Crisis
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery into a green future
– Support for other basic items (e.g., food, housing, public transport, medicines)
Author Loucas Antoniou (INEK) and Eurofound
Measure added 31 May 2023 (updated 13 March 2024)

Background information

On 2 May 2023, the Cabinet issued a decree that amends the VAT legislation to apply a zero rate of VAT to supplies of certain essential goods. The aim of the measure is to relieve households from the increasing prices of essential goods due to the economic impacts of the pandemic and the war in Ukraine.

Content of measure

The list of the essential goods included in the Zero VAT list are:

  • Bread: all types of bread, fresh or frozen, with or without yeast (e.g., white, black, wholemeal, multigrain, peasant, rye, rye bread, corn bread, baguette, ciabatta, bread in fritters, loaves, bread rolls, pitta bread). Bakery products with added ingredients such as raisins, nuts, flavourings are excluded from the list.
  • Milk: fresh milk (e.g., cow's milk, goat's milk, sheep's milk), sweetened milk, condensed, long-life, flavoured milk (e.g., chocolate, banana), plant milk (e.g., almond, soy, rice).
  • Eggs
  • Baby food: powdered, dry and/or liquid food intended for consumption by children. Snacks (e.g., chips, dry or powdered food, dried food, nuts, candy, chocolate, ice cream etc.) are excluded from the list.
  • Children's diapers
  • Products for feminine hygiene protection (tampons, sanitary towels, sanitary napkins)
  • Adult diapers

This measure is expected to cost €11 million.


The following updates to this measure have been made after it came into effect.

21 February 2024

On 21 February 2024, the Cabinet decided that the measure for zero rate of VAT on essential goods will remain in force until the end of May 2024.

13 September 2023

On 9 September 2023, the Cabinet decided to extent the measure for another 6 months and expand the list of essential goods with zero VAT by adding coffee and sugar. Additionally, on 19 October, the Minister of Finance announced that meat and vegetables are included in the zero VAT list from 1 December 2023 to 31 May 2024.

Use of measure

No information available.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A


The measure was designed by the Ministry of Finance and the Tax Department and upon the decision of the members of the Cabinet; no social partner or political party has been invited to participate in any kind of consultation. However, the measure emerged after the pressure that civil society, political parties and the union movement exercised to the government to take measure in order to relieve consumers from the increased prices.

Views and reactions

Social partners, political parties and the consumers’ associations welcomed the decision of the government. At the same time, they highlighted the necessity for inspections for the right implementation of the measure by the providers of the essential goods in the list. They also pointed out the need for the expansion of the essential goods with zero VAT.


  • 02 May 2023: Μηδενικός Συντελεστής ΦΠΑ σε Βασικά Είδη (


Eurofound (2023), Zero VAT rate for essential goods , measure CY-2023-18/3178 (measures in Cyprus), EU PolicyWatch, Dublin,


Eurofound publications based on EU PolicyWatch

30 January 2023


Measures to lessen the impact of the inflation and energy crisis on citizens

Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.


12 September 2022


First responses to cushion the impact of inflation on citizens

Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.


12 September 2022


Policies to support EU companies affected by the war in Ukraine

This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.


5 July 2022


Policies to support refugees from Ukraine

This article summarises the first policy responses of EU Member States, including those of the social partners and other civil society actors, enabling refugees to exercise their rights under the Temporary Protection Directive.


Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.