VAT Update

Cyprus national fiscal package of measures to counter coronavirus refers to the following VAT related measures in an attempt to support business liquidity and strengthening of internal consumption.

It specifically refers to the following:

1. Temporary suspension of the obligation to pay VAT for two months, without the imposition of any penalties and interest.

This measure refers to:

1. businesses, whose turnover was not more than € 1million according to the tax returns filed in 2019 and
2. businesses whose turnover will have been reduced by more than 25% of the one declared for the corresponding months in 2019.

It is noted that such arrangements will be made so that the VAT payable amounts
will be paid progressively until the 11th of November 2020.

This measure will increase business liquidity during the period in which
businesses are expected to face a liquidity problem.

2. Temporary suspension of the submission of the VAT return ending in
February 2020:

The deadline for the submission of the VAT Return covering the period December
2019 – February 2020 which was due by the 10th of April 2020 has been
extended to the 30th of April 2020, provided that:

1. the taxable person pays the VAT payable amount until the 10th of November 2020 and
2. the total sales of the taxable person for the period from 01st of March 2019
   till the 29th of February 2020 have not exceeded € 1million.

3. Temporary reduction of the Standard VAT rate and one of the Reduced
VAT rates:

1. the Standard VAT rate of 19% will be reduced to 17% over a two-month
   period from 1st of April 2020 to 31st of May 2020 and
2. The Reduced VAT rate of 9% will be reduced to 7% for a period of three
   and a half months, from 1st of April 2020 till the 15th of July 2020.

For more information, please feel free to contact us at VAT@kinanis.com.