TABLE OF CONTENTS
This guide explains how employees can claim business-related expenses in Cyprus, including mileage rules, documentation requirements, and tax considerations.
All reimbursed expenses must be wholly and exclusively for business purposes.
Claims should be reasonable, justifiable, and supported by proper documentation.
If travel includes personal elements or excessive costs (e.g., first-class flights when economy is standard), the excess may be treated as a taxable benefit in kind.
Documentation Requirements
For reimbursement to be non-taxable and deductible for the company, documentation must include:
Business purpose of the trip.
Date(s) of travel.
Origin and destination.
Mode of transport.
Cost incurred.
Evidence of payment (invoice or receipt).
For mileage claims: a logbook tracking journeys (business vs personal use), retained for at least six years.
Invoices should ideally include the company name:
Horizons Global Technologies (Cyprus) Limited
Tax Identification Number (TIN): 60140973X
Mileage & Transport Costs
Mileage reimbursement for private car use:
Non-taxable if rate does not exceed €0.25 per km.
Must be supported by a logbook and business purpose.
Parking and tolls:
Reimbursable separately with receipts.
Do not include in mileage unless policy explicitly covers them.
Air/train/bus/taxi/rental cars:
Reimbursable if business-related and documented.
Ensure invoice/receipt and employer authorization.
Accommodation & Meals
Hotel costs for business trips: Invoice should be issued and business purpose documented.
Meals during business travel: Allowed if policy permits and purpose is clear.
Per Diems & Allowances
Cyprus tax guidance:
Actual costs for business travel (transport, accommodation, meals) are not a benefit in kind.
Lump-sum per diems exceeding actual costs may be treated as taxable benefits.
Internal policy should define reasonable per diem rates aligned with actual costs.
Tax Treatment
Business-related reimbursements: Non-taxable if properly documented.
Non-business or personal expenses: Taxable as employment income.
Wellness expenses (gym, therapy, etc.): Generally taxable unless part of an approved corporate program.
VAT Considerations
Cyprus VAT applies to most goods/services (standard rate 19%).
For VAT recovery:
Ensure invoices show VAT details.
Entity name must match the contracting company.