Capital
Nicosia
Currency
Euro
Languages
Greek, Turkish
Population size
1.2M
Average Monthly Salary
€1300
EU
Since 2004
Region
Southeast-Europe
Gift Giving Norms
Modest gifts; personal courtesy important
Major Corporate Gift Days
Christmas, Greek Easter
Customs Complexity
Medium
VAT - Standard Rate
19%
Duty Free Threshold
€150
Ave Duty Rate
2%
1. Employee Merch vs. Gifts
Cyprus generally follows EU principles regarding taxation. Merchandise given to employees can be non-taxable if deemed necessary for their work, while items viewed as extra compensation may be taxed as benefits in kind. The Tax Department, under the Ministry of Finance, provides detailed guidance on thresholds and interpretations.
1.1 Merchandise for Employees
Work-Related (Generally Non-Taxable)
Uniforms & Essential Tools
Items such as branded clothing needed for day-to-day work typically remain outside the scope of taxable income.
Occasional Low-Value Perks
Small gifts (e.g., a coffee mug with the company logo) may be accepted as a work-related benefit if modest in value, though there is no formal tax-free gift allowance.
Potentially Taxable Benefits
Non-Work Items
Goods of higher value or purely personal use (electronic gadgets, expensive apparel) could be treated as an employee benefit and thus included in taxable wages.
Repetitive Gifts
Providing multiple gifts throughout the year risks being seen as disguised salary. Seek local advice if you plan regular merch distributions.
1.2 Gifts for Non-Employees (Clients, Partners, Event Attendees)
Tax & Deductibility
Business gifts may be deductible if they serve a legitimate marketing or relationship-building purpose. High-value or repeated gifts lacking a clear business rationale could raise questions.
Compliance & Anti-Corruption
Cyprus adheres to EU directives on anti-bribery. Keep gift values moderate, especially if dealing with public officials, and retain records showing legitimate business intent.
1.3 Marketing Merch
Promotional Merchandise
Branded items primarily used for advertising (such as T-shirts, pens, or water bottles) typically qualify as marketing expenses. Document expenditure details and distribution lists for potential audits.
2. Shipping, Customs & Duties
2.1 Shipping
2.2 Importing
Import Duties & VAT
Goods arriving from non-EU countries may incur customs duties above a certain threshold (commonly €150), in addition to 19% Cypriot VAT on (value + shipping + duties).
Documentation
A commercial invoice, correct product descriptions, and HS codes facilitate customs clearance.
2.3 DDP vs. DAP
Delivered Duty Paid (DDP)
The sender pays all import taxes/fees, simplifying receipt for the customer.
Delivered At Place (DAP)
The recipient is responsible for import costs upon arrival, which can lead to delays if unexpected.
2.4 With Monday Merch
Our warehouse in Rotterdam (the Netherlands) handles EU shipments duty-free. We can also advise on any VAT-related processes to ensure a smooth delivery experience in Cyprus.
3. Cultural & Local Etiquette
3.1 Gifting customs
4. Sustainability & Local Regulations
4.1 Sustainability & Regulations
5. HR & Employee Relations Considerations
5.1 HR & Employee Relations
6. Summary and Key Takeaways
6.1 Summary & Takeaways
7. Frequently Asked Questions
7.1 Questions & Answers
Does giving staff merch incur tax?
Merch that’s clearly job-related is non-taxable; personal perks might be taxed.
Are B2B gifts deductible in Cyprus?
Yes, typically, if they have a clear business purpose and stay within reasonable cost limits.
Cultural advice?
Cypriots appreciate warm relationships—small, heartfelt gifts can bolster trust.
