Cyprus has approved measures to ease inflationary pressures, including temporary 0% VAT on essential food products, lower heating oil and solar panel taxes, electricity subsidies, and targeted financial support for households and businesses.
The Cyprus Council of Ministers and the Ministry of Finance announced a series of economic measures on 30 September 2026, designed to address rising prices across essential goods and services.
Tax reductions on food and energy
Cyprus will apply 0% VAT to selected food products during temporary periods. From 1 October 2026 to 31 May 2027, the zero rate will cover fresh, chilled, or frozen meat and fish, including beef, pork, sheep and goat meat, poultry, rabbit, fish, cuttlefish, squid, and octopus.
Meat and fish preparations, such as sausages, burgers, canned fish, and smoked or marinated products, will remain subject to the 5% reduced VAT rate. From 12 October 2026 to 31 May 2027, the zero rate will also apply to bread, milk, coffee, sugar, and baby food, while products such as pastries, ready-made coffee drinks, confectionery, snacks, and other excluded items will remain subject to their existing VAT rates.
A reduction in consumption tax on heating oil takes effect on 1 November 2026, dropping from 7.4 cents to 2.1 cents per litre through 30 April 2027.
Green energy incentive
Solar panel installations become more affordable for households as VAT decreases from 19% to 9%.
Support for households and businesses
Electricity subsidies continue into 2027, covering 23,300 vulnerable households with full protection from price increases and providing 85% subsidy coverage to approximately 82,500 commercial users. An emergency payment of EUR 200 goes to 53,511 low-income beneficiaries as immediate relief.
Residents in mountainous areas receive a boost to their regional allowances, with EUR 50 added per household and EUR 35 per person distributed to 10,500 households and 24,000 total beneficiaries.
This adjustment applies to household photovoltaic systems once published in the Official Gazette of the Republic.
