E-invoicing in Cyprus is rapidly becoming important to the country’s accounting and tax compliance processes. On April 2020, the government of Cyprus released new regulations stipulating that all central and sub-central public entities must be able to receive and process electronic invoices.
The Cyprus electronic invoicing system was optional from 2010 until 2013 when all EU member states were legally obligated to comply with the European Union’s Directive 2011/7/EU. This directive requires the Cypriot government to be able to receive and process electronic invoices from suppliers.
In 2018, Cyprus adopted Directive 2014/55/EU, which governs e-invoicing in the EU. This directive requires public entities in the EU to provide secure and reliable systems that can receive, process, and store electronic invoices.
It sets out specific measures for exchanging electronic invoices between public entities and suppliers. It also provides the technical specifications to adhere to when exchanging these documents.
In this article, we will discuss whether e-invoicing is mandatory in Cyprus, how to send an e-invoice, and what businesses must do to comply with the regulations.
Is e-invoicing mandatory in Cyprus?
Cyprus has implemented the e-invoicing system, and all public entities in the country must be able to receive and process electronic invoices. However, it is not yet mandatory for them to send electronic invoices to their suppliers.
For private entities, electronic invoicing is optional in Cyprus. However, it is under review by the government, and it is expected to become mandatory in the near future.
How to send compliant e-invoices in Cyprus?
Cyprus e-invoicing regulations require e-invoices to be sent electronically in a standardized format. Public entities and other suppliers sending and receiving electronic invoices must be connected to PEPPOL Access Points through certified e-invoicing service providers.
PEPPOL is a European e-invoicing network that helps companies exchange e-invoices securely. It is based on BIS (Business Interoperability Specification), a set of e-invoicing standards that make e-invoicing safe and efficient.
Cyprus's e-invoicing process complies with e-invoicing standards the European Union sets out. Here are the steps to follow to send compliant e-invoices in Cyprus:
1. Connect to a PEPPOL Access Point
PEPPOL Access Points are certified e-invoicing service providers that enable companies to exchange e-invoices securely. They are responsible for ensuring compliance with e-invoicing regulations and standards.
PEPPOL Access Point providers such as Storecove can help companies connect to the e-invoicing network. Storecove allows economic operators to submit e-invoices directly to their customers without installing software.
2. Create your electronic invoices
E-invoices must be created in a standardized format that adheres to e-invoicing regulations in Cyprus. The e-invoice must include the sender’s registered details, the recipient’s registered details, the e-invoice code, and any other relevant information.
3. Submit your e-invoice to the Treasury of the Republic
The Treasury of the Republic is the government body responsible for e-invoicing in Cyprus. It is responsible for receiving e-invoices from suppliers, processing them, and storing them in a secure database.
The Cypriot government portal, ARIADNI, allows economic operators to submit e-invoices to the Treasury of the Republic for processing. The e-invoices are then stored securely in a database for the period specified by e-invoicing regulations.
4. Processing and payment
The Treasury of the Republic processes the e-invoices to ensure compliance with e-invoicing regulations. If the e-invoice is compliant, it will be approved, and the supplier will pay.
Electronic invoices in Cyprus were processed manually until January 2022, when the Cypriot government adopted the centralized ERP (Enterprise Resource Planning) system. This system automates e-invoicing processes and reduces the time it takes to process e-invoices.
Currently, there are no explicit requirements for e-invoice issuance in Cyprus. However, e-invoicing is expected to become mandatory in the near future.
Companies that wish to comply with e-invoicing regulations should ensure that they are connected to a certified PEPPOL Access Point that complies with e-invoicing standards in Cyprus.
5. Store e-invoices securely
Once e-invoices have been submitted to the Treasury of the Republic, they must be stored securely for the period specified by e-invoicing regulations. Companies must ensure that e-invoices are stored in a secure database to comply with e-invoicing regulations in Cyprus.
Following these steps will help ensure e-invoices comply with e-invoicing regulations in Cyprus. Companies should ensure they stay up-to-date with e-invoicing regulations in Cyprus to remain compliant.
E-invoicing is becoming increasingly important in Cyprus as e-invoicing regulations become more stringent. Companies that embrace e-invoicing can save money and time while remaining compliant with e-invoicing regulations.
Characteristics of the electronic invoice in Cyprus
An electronic invoice in Cyprus must meet certain requirements to be considered compliant. It has to go through a specific network, central governmental entities, public procurement, and tax authority.
It must also have certain information, such as the sender and recipient's details, a unique sequential number, the content of goods or services, VAT, and other taxes, if applicable.
Let us look at the characteristics of an electronic invoice in Cyprus:
The electronic invoice in Cyprus uses the PEPPOL Access Point Network and the central government's ARIADNI portal to transmit invoices.
This portal is managed by central governmental entities, public procurement, and the tax authority in Cyprus. It is a central infrastructure that allows invoices to be securely transmitted between customers and suppliers.
The electronic invoice in Cyprus follows the PEPPOL format, CIUS – PEPPOL BIS Billing 3.0. The PEPPOL BIS Billing 3.0 is a European standard of electronic invoicing based on EN16931.
The specification for the PEPPOL BIS Billing 3.0 is a Core Invoice Usage Specification (CIUS), which is an extension of the UBL standard. So, any invoice generated in the PEPPOL BIS Billing 3.0 format complies with EN16931 and UBL standards.
The government of Cyprus requires all electronic invoices to be stored for 8 years after the post-audit. This enables tax authorities to access e-invoices for audit purposes.
Companies must ensure that invoices are stored in a secure and reliable system to comply with e-invoicing regulations in Cyprus. The government of Cyprus also requires that companies store e-invoices independently from other documents, such as purchase orders.
Unlike most countries, the government of Cyprus does not require e-invoices to have digital signatures. However, companies can use digital signatures for additional security and to reduce the risk of fraud.
Digital signatures provide an extra layer of security to documents by providing a secure and tamper-proof way to authenticate the sender and recipient of the document. It also guarantees the integrity of the document’s contents.
Invoice basic elements
The electronic invoice in Cyprus must contain certain information, such as the sender and recipient's details, a unique sequential number, and more. Here is a list of the basic information required for an electronic invoice in Cyprus:
Date of issuance
When e-invoices are created, they must include the date of issuance. This is to ensure e-invoices are identifiable as coming from the issuer. It also facilitates e-invoice processing by the Treasury of the Republic.
If the date of issuance differs from the date of supply, the e-invoice must clarify the dates. Your PEPPOL Access Point provider can help you with this.
Unique sequential number
A sequential number is a unique identifier assigned to e-invoices. The Treasury of the Republic uses this number to identify e-invoices and process them accordingly.
Supplier's VAT number
The supplier’s Value Added Tax (VAT) number helps ensure the e-invoice is from a registered supplier and facilitates the Treasury of the Republic’s subsequent processing.
Supplier's and customer's personal data
The customer's and supplier's details, such as name, address, and contact information, help ensure e-invoices are legitimate. It is an effective way for the Treasury of the Republic to identify e-invoices and ensure compliance with e-invoicing regulations.
Details of the goods
E-invoices must include the details of the goods, such as the VAT rate, which will be used to calculate the tax payable. This helps central governmental entities and public procurement offices to manage tax collection more effectively.
You must also state the gross value of the goods and include any discounts or refunds that may apply. If you are offering a discount, you must include it on the e-invoice. This is to ensure the tax authority can accurately calculate taxes payable by the customer.
What should businesses do to comply with the e-invoice regulations in Cyprus?
Businesses must use a trusted PEPPOL Access Point provider like Storecove that provides secure and reliable e-invoicing services. This helps to ensure compliance with public procurement and taxation regulations in Cyprus.
Businesses must also implement a reliable system to store e-invoices for 8 years after the post-audit. This allows tax authorities to access e-invoices for audit purposes.
Customers should also ensure that they can receive and process e-invoices securely. Using a trusted e-invoicing provider is the best way to ensure compliance with the e-invoicing regulations in Cyprus.
Takeaway: Comply with electronic invoicing regulations in Cyprus to operate your business smoothly
E-invoices are transforming the way businesses in Cyprus operate. They allow for faster, more efficient tax collection and public procurement transactions.
You can ensure your business in Cyprus runs smoothly without disruption from tax authorities or public procurement offices by complying with the e-invoicing regulations.
You must choose a trusted PEPPOL Access Point provider and have a reliable system to store e-invoices for 8 years.
Storecove offers a secure, reliable e-invoicing model that helps businesses comply with e-invoicing regulations in Cyprus. With Storecove, you can ensure tax collection and public procurement transactions are quick and efficient.
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