Cyprus government announced on the 15th of March 2020 a package of economic measures to help the affected local economy.
Additional measures have been approved by the Ministry of Finance on the 18th of March 2020. The measures include a VAT payment pause of two (2) months and the reduction of VAT from 19% to 17% and from 9% to 7%.
The VAT-related measures:
- Extension of the VAT payment for two (2) months. The deadline for the VAT quarter ending 29 of February 2020 is the 10th of April 2020. The deadline after the extension will be the 10th of June 2020.
- This update affects companies with a turnover of less than €1 million and companies that see their turnover reduced more than 25% after the virus impacts, always according to their 2019 tax declarations. Arrangements will be made for tax due to be paid in instalments by the 11th of November 2020. The deadline for the submission of the VAT return of the quarter ending on the 29th of February 2020 will be extended until the end of April 2020, provided that the relevant VAT liability will be settled not later than the 10th of November 2020.
- Another important measure is the temporary reduction of VAT from 19% to 17% for a period of two months (1 April 2020 – 31 May 2020). In addition, there will be a temporary reduced rate reduction from 9% to 7% for a period of three and a half months (1 April 2020 – 15 July 2020). The rate applies for hotels and hospitality services, restaurants as well as to domestic transportation services.