Cyprus Government continues to actively support business

June 10, 2020

In Cyprus, the process of gradual lifting of restrictive measures began in May. At the moment, most of the business is already operating, including the service sector. However, many businesses have suffered, being completely or partially closed for several months. Therefore, the Government of Cyprus maintains and extends measures to support businesses and citizens.

Thus, plans for state support of employees, enterprises and self-employed workers have been extended until the 12 of June. Remind you that the Government of Cyprus has developed plans to support businesses and the self-employed:

  • “Special Unemployment Allowance 1”
  • “Special Unemployment Allowance 2”
  • “Special Allowance for the Self Employed”

Some additional measures are as follows:

  • The obligation for submission of Company Income Tax Return (TD4) and the Declaration of Self-Employed with Accounts (TD 1 ACC) for the financial year 2018 is extended from the 31st of March 2020 to the 30 of June 2020.
  • Reduction of VAT from 9% to 5% for the period from the 1st of July 2020 until the 10th of January 2021 for the tourist accommodation and catering sector.
  • The obligation of workers to submit the tax returns and pay the due tax is extended until October 2020.
  • Deletion of charges that have been imposed due to the late submission of tax returns for the period that ended on the 10 of April 2020 and 10 of May 2020.
  • People that receive income from immovable property rentals will receive a tax discount equal to 50% of the reduced lease amount, that has been applied by the owner voluntarily and it covers the rent reduction that is not beyond 50% and not less than 30% of the total rent (maximum duration is 3 months and is valid from the 1st of April 2020 until the 30th of June 2020).

Also, we would like to highlight the entry of the Republic of Cyprus into Pan-European Guarantee Fund. This is a new tool that was created on 26 of May by the European Union to counter the effects of the virus. Cyprus will make its contribution to the Fund in the amount of 32.5 million euros in the form of guarantees. The Fund will provide banks with direct guarantees of up to 80% on loans to small and medium-sized businesses.

Financing in the amount of up to Euro 800 million through the Cyprus Entrepreneurship Fund, which has been created to provide liquidity to small and medium sized companies through the provision of loans by credit institutions, with favourable terms.

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