What is the Expense Reimbursement Policy in Cyprus?



Modified on: Mon, 17 Nov, 2025 at 8:21 PM

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.

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article



Related Articles