Brief overview of the key measures taken in Cyprus to support business

During the period from March 2020 to the present day, state authorities of Cyprus have taken and continue to take various measures to support the business and economy of the island during the spread of the virus.

We suggest that you learn the main ones.

Submission of reports and VAT payment procedure

In accordance with the Value Added Tax Law (as amended) of 2020 (L. 24 (I) / 2020) (VAT Law), the right to suspend the obligation to pay VAT shall be granted to persons registered in the VAT Register whose specified tax periods end on February 29, 2020, March 31, 2020 and April 30, 2020. This rule shall apply subject to timely filing of one’s tax return and payment of the tax by November 10, 2020, and shall not apply to companies of certain industries.

Despite amendments to the provisions of the VAT Law, any individual or legal entity that was notified by the tax department of the tax period, shall pay the tax payable on the date of filing of the tax return as follows:

  • Full amount, if they fall under one of the areas of activity to which no earlier amendments apply;
  • 30% of the amount, and the remaining part shall be payable in accordance with the VAT Law.

Postponement for filing of tax returns

The obligation to file a company income tax return (TD4) and a return for the self-employed with accounts (TD 1 ACC) for 2018 fiscal year is extended until June 1, 2020.

Support for companies, provision of liquidity and stimulation of domestic consumption

The Support Plan has been developed for companies with partial suspension of activities (Special Unemployment Allowance 1 list). This plan applies to all enterprises that registered a reduction in their turnover of more than 25% in March or April, and in case such a reduction was caused by the measures aimed at fighting the virus.

The Support Plan has been developed for companies with complete suspension of activities (Special Unemployment Allowance 2 list). This plan applies to all enterprises that completely suspended their activities in accordance with the regulations of the Ministry of Health and the relevant resolutions of the Council of Ministers.

Support for the banking sector

  1. Obligations to repay any loan payments, including interest on facility lines that were granted and/or acquired and/or managed by credit institutions are suspended for individuals, state organizations, individual entrepreneurs and enterprises. Operations with syndicated loans provided jointly by credit institutions or third parties are also suspended.
  2. The above suspension applies only to beneficiaries that had no outstanding contributions within 30 days from February 29, 2020 and are now facing financial difficulties as a result of the pandemic.
  3. Beneficiaries shall notify credit institutions in writing (by e-mail, fax, post) of their interest in suspending the loan by providing the relevant notification included in the Decree dated March 30, 2020 on emergency measures for loan suspension.
  4. After the suspension period expires:
  • The total amount of interest that has been suspended will be added to the total amount of the loan;
  • Suspended loan payments (capital and interest) will not be immediately paid to the credit institution, unless otherwise agreed between the credit institution and beneficiaries;
  • The loan repayment period will be automatically extended as required until the final calculation of the loan amount (capital and interest).

5. During the suspension period, beneficiaries are entitled by duly notifying the credit institution to settle any payments that should have been due if the suspension was not applied.

Social insurance contributions

  1. Social insurance contributions for February payable by March 31, 2020 may be paid by April 14, 2020.
  2. Social insurance contributions for March payable by April 30, 2020 may be paid by May 14, 2020.

Overdue social contributions

The obligation to pay contributions is suspended for March and April for debtors who are obliged to repay overdue social contributions in installments in accordance with the Law on the Control of Overdue Social Contributions.

Milena Saakyan

Business Development Manager

Korpus Prava (Cyprus)

Other Articles on Topics
See Also Articles from the Issue
No relaxation during “Bed rest”

Under the current global circumstances, pretty much all business areas face difficulties, including financial institutions and corporate administrators. All current and potential clients are important for any company, but especially in any unstable economic conditions.

June 25, 2020

Online onboarding – thanks for being there for us

Due to the current global situation, it is quite difficult to schedule a meeting at the moment. What actions may be taken to ensure that the working process with new clients is not suspended, while all legal requirements are still met?

June 25, 2020

Anti-crisis measures for the corporate sector in Cyprus

Currently, all areas of life and economic activities experience difficulties with operating, including areas of corporate management and corporate reporting.

June 25, 2020

Fresh take on remote meetings held by companies in Cyprus: theory and practice

Due to the introduction of travel restrictions and quarantines it has become virtually impossible to hold face-to-face meetings, as well as to ensure the presence of company shareholders and directors.

June 25, 2020

Impact of the new virus on corporate procedures

In view of the spread of new virus the Government decided to introduce a number of changes into corporate procedures carried out by joint-stock companies and limited liability companies.

June 25, 2020

Interest on interest – new tax for individuals

In 2020, the phrase “The world will never be the same again” became really popular. And this statement has already become reality for people who keep their savings with Russian banks.

June 25, 2020

Amendments to double taxation conventions. Old games, new rules

Nowadays we all live in a state of constant uncertainty, which is why it is more important than ever to separate rumors from facts, panic attacks from strategic planning, and treat everything we hear and see with a critical eye.

June 25, 2020

… and again I’m back to start, I am back to Leningrad!

Under the current conditions, the main restriction faced by all individuals and corporations is travel restrictions for individuals, cancellation of air service, and closure of borders.

June 25, 2020

Searching for force majeure…

The introduction of restrictive measures in a number of regions of the Russian Federation aimed at preventing the spread of the new virus caused numerous difficulties related to the inability of the parties to perform their obligations, disruption of events, etc.

June 25, 2020

Possible reasons for out-of-court repudiation of the agreement

This article provides a consolidated list of the reasons for repudiation of the agreement set by the current law. This list is not exhaustive, and the possibility of applying a particular reason should be further checked in each case.

June 25, 2020

Special reasons for exemption from liability for non-repatriation of foreign currency earnings

Under the current circumstances, proper execution of transactions between foreign counterparties has become significantly harder.

June 25, 2020

Lessee vs Lessor: which side is the new virus on?

Under the current conditions, various lessee organizations face the following problem: they have to pay rent for vacant premises (offices, shops, pavilions).

June 25, 2020

Prevention and treatment of the government contract breach

New virus is a current factor that seriously hinders economic growth and threatens the well-being of both individuals and businesses. Regardless of the measures taken by the government to give assistance to affected businesses, the current situation is fraught with losses that are unavoidable.

June 23, 2020

Supporting measures for accountants in lockdown

This article covers the most significant changes related to those economic areas that are not recognized as particularly affected, as well as some measures to support small and medium-sized businesses operating in the affected economic areas.

June 23, 2020

Brief overview of the key measures taken in Hong Kong to support business

In early April 2020, Hong Kong announced adoption of an economic support package of HKD 137.5 billion (USD 17.6 billion) to help individuals and industries affected by the outbreak of new virus.

June 23, 2020

Subsribe to the Journal

Your subscription to our journal will definitely boost the efficiency of your specialists and downsize your expenses for consultants.