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Tax and VAT Measures

Tax and VAT measures taken by the Cyprus Government and approved by the Cyprus Parliament as a result of the COVID-19 Crisis

Angelos Petrou, Snr Manager, Tax

 

The Cyprus Government has adopted the following Tax and VAT relates measures to support businesses in dealing with the financial impact of the Coronavirus outbreak:

Extension to the Submission of Tax Returns

The submission date for the 2018 tax return for companies (IR4 form) and for self-employed persons who prepare audited F/S (IR1 form) has been extended from 31/3/20 to 31/5/20. 

Temporary deferral of VAT payment

The obligation of taxpayers to pay VAT for the VAT periods ending February, March and April 2020 has been deferred. There will be no additional tax or interest on the deferred payment provided that the VAT returns are submitted by the relevant due dates. For example, the due date for submission of the VAT return for the period 1/12/19 to 28/2/20 is the 10th of April 2020. The VAT amounts due may be paid in instalments until 10 November 2020.

The above arrangement does not apply for certain categories businesses which remain open as per the Government decisions such as supermarkets, bakeries and confectionary stores, meat/fish and fruit markets, gas and electricity stations/suppliers, telecommunication companies, companies selling electronics and computer equipment and peripherals and pharmacies etc.

Instalment repayment arrangement Plan (Ariadne)

For debtors who are included in the instalment repayment arrangement plan for overdue taxes (Ariadne plan), the payment of instalments for the months of March and April is extended by two months.

Contributions to National Health Scheme (NHS)

The increase of the percentage of the contributions to the National Health Scheme (YESI) will apply as originally planned for the month of March 2020 but will revert to the previous rates for the months of April, May and June 2020 as follows:

Contributor’s category

March

April to June

July onwards

Employees

2,65%

1,7%

2,65%

Employers

2,90%

1,85%

2,90%

Self Employed persons

4%

2,55%

4%

The Republic or natural/legal person responsible for the remuneration of Officers

2,9%

1,85%

2,9%

The Republic

4,7%

1,65%

4,7%

 

BDO’s Tax team can assist in discussions with the Cyprus Revenue Authorities in relation to the potential deferral of VAT and tax payment obligations. 

For more information, contact Nikos Katsaris, tax partner or Angelos Petrou, Snr. Tax Manager.