As from 1st January 2010, a number of changes will come into force affecting the cross-border supply of services within the EU.  The place of supply of such services, which determines the place where VAT must be paid, will no longer considered to be the place where the supplier is established but, instead, the place where the customer is established. This simplification means that the  majority of services from Cyprus to EU businesses will be free of VAT by applying the reverse charge rule.
                                                        
This relaxation comes at a cost: businesses offering services to EU customers must register with the Cyprus VAT Authorities and report on the so-called VIES return, all such transactions they have performed on a monthly basis.

The changes do not affect services offered  to businesses in Russia.