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)

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