Reverse Charge on the acquisition of precious metals

The Cyprus House of Representatives has recently approved the amendment of the Cyprus VAT Act (95(I)/2000), by virtue of introducing article 11στ. More precisely, as per the provisions of Law 152(I)/2022, effective  as from 7/10/2022, the reverse charge mechanism shall be applicable to the acquisition of raw and semi-finished precious metals. The recipient of the precious metals is therefore obliged to self-account for and pay 19% output VAT on the value of the acquired goods, provided that the precious metals comply with the following requirements:

i.             they are supplied by a taxable person,

ii.            they fall under the definition of raw and semi-finished precious metals; and

iii.           they are acquired by a taxable person acting as such.

Buyers of raw and semi-finished precious metals are obliged to maintain a separate register in accordance with the relevant provisions of the Cyprus Organization for the Hallmarking of Articles of Precious Metals Law of 2009 (Ν.52/2009).

Should you like to further discuss the content and potential impact of the above case, please contact one of our trusted advisors from the Indirect Tax Department at KPMG Cyprus.