One can answer this by saying that there are many examples of businesses not even planning to achieve compliance, which has ultimately cost them dear. Even though Cyprus VAT rates are the lowest within the EU, currently standing at 15% of gross transaction values, it would be foolhardy to ignore it. VAT rates rates, in general, are so high that the tax itself may be higher than any net, or even gross, profit to be made.
Even basic compliance will not be achieved without a little planning in its widest sense. Planning can be as simple as making sure that the business complies with the legislation and avails itself of the available reliefs. No sensible business should miss these opportunities.
VAT planning involves having a proactive attitude, avoiding problems before they arise or else grasping opportunities that exist ( or sometimes creating opportunities), rather than merely reacting to visits from the VAT Service of the Customs and Excise department. It is as much to do as ensuring that contractual arrangements between commercial counterparties are satisfactory for all concerned and that VAT consequences are properly factored into commercial decisions before they are made. Once a contract has been entered into without thought for the VAT consequences, the damage may already have been done; the VAT consequences will have been set by the transaction and cannot be altered at a later date.