Covid19 – Cyprus Government Response

Economic Support Measures to mitigate the effects of COVID19 in the Cyprus economy

In the context of the measures taken by the government to support companies / businesses affected by the restrictive measures imposed to limit the spread of COVID19 (Coronavirus), the Government of Cyprus issued the following announcements in relation to various laws.

Special Sick Leave Allowance

The Special Sick Leave Allowance applies for private sector employees or self-employed persons who fall into any of the following categories:

i. persons who are on the list of vulnerable groups as designated by the Ministry of Health;

ii. persons subject to compulsory isolation (quarantine) and self-isolation;

iii. persons infected with COVID 19 and holding a certificate from the Ministry of Health;

iv. persons aged 63-65 years who do not receive a statutory pension, fall under categories (i), (ii) or (iii) above and hold the corresponding certificate. The Special Sick Leave Allowance is granted only to persons who work for the period for which they are applying for Special Sick Leave Allowance and are insured with the Social Insurance Fund, are up to 65 years of age and do not receive statutory pension.

For more information click here.

Special Leave for Child Care

Special Leave for Child Care applies for working parents responsible for the care of children up to 15 years old and/or children with disabilities, regardless of age, whom, due to the nature of their work, cannot work either remotely or at home or with flexible working hours and where there is no in – house help.

For more information click here.

Special Scheme for Self Employed

The Special Scheme for Self-employed Workers is applicable for:

  • Self-employed workers who have fully suspended their operations according to the Decrees of the Minister of Health and the relevant decisions of the Ministerial Council given that the nature or/and the way they operate has not been altered, and
  • Self-employed workers who have partially suspended their operations, meaning they have a decrease in their turnover in the order of more than 25% during the month of March 2020 and they predict an equivalent decrease in turnover for the month of April 2020 as well, in comparison to the corresponding months of the previous year and the decrease in their turnover is exclusively a result of the state their operation entered due to the COVID 19 coronavirus pandemic. In case the operation was not in business then the comparison will be made with the months preceding March 2020.

For more information click here.

Special Scheme for Complete Suspension of Business and Provision of a Special Unemployment Benefit

The Special Scheme for Complete Suspension of Business and the Provision of a Special Unemployment Benefit is valid for:

Businesses (legal or natural persons who are employers) who have completely suspended their operation, in accordance with the Decrees of the Minister of Health and the relevant decisions of the Council of Ministers, provided that the nature and / or mode of their operation has not changed.

The basic requirement for participation in the Scheme is that no employee has been fired since 1 March 2020, and in case the application is approved, any employee should not be dismissed either during the period of participation in the Scheme or during an additional period equal to the period of participation in the Scheme, plus one additional month (excluding cases where dismissal without notice is justified). It is understood that businesses will not be able to fire employees for financial reasons during the above period.

For more information click here.

Special Scheme for Partial Suspension of Business

The Special Scheme for Partial Suspension of Business and provision of a Special Unemployment Benefit is valid for businesses (legal or natural persons who are employers) who have partially suspended their operation, that is, they have a turnover decline greater than 25% in March 2020 and are projecting a corresponding drop in turnover for April 2020, as compared to the corresponding months of the previous year and the decline in turnover is solely due to the state of the business as a result of the COVID-19 Coronavirus Pandemic.

In the cases of businesses that were not active during the corresponding period of the previous year, the basis for comparison will be the months immediately proceeding March 2020.

For more information click here.

Reduction of General Healthcare System Contributions for a period of three months

The revised rates of the GHS Contributions are set as follows: 

GHS Contribution Rates 1/3/2020 -31/3/2020 1/4/2020 -30/6/2020 1/7/2020 onwards 
Employees 2.65% 1.70% 2.65% 
Employers 2.90% 1.85% 2.90% 
Individual holding an office or employment 2.65% 1.70% 2.65% 

In the event where businesses/employers have already proceeded with the implementation of the reduced rates for March 2020, the 3-month period applies from 1 March 2020 to 31st May 2020 for those businesses/employers only. In the event where the reduced rates have not been applied for March 2020, the 3-month period applies from 1 April 2020 to 30 June 2020. 

Temporary deferral of VAT payable

The newly published law provides for the deferral of the VAT payable amounts for the periods ending 29 February 2020, 31 March 2020 and 30 April 2020, until 10 November 2020.  The temporary deferral would apply provided that: 

  1. The taxable person submits the relevant VAT return by the statutory due date, and 
  1. the VAT payable amount for the above periods is settled by 10 November 2020. 

As long as these conditions are satisfied, the following will not be applicable for the above-mentioned periods: 

– additional tax of 10% on VAT payable amounts; 

– the annual interest of 1,75% thereof; and  

– criminal sanctions against taxable persons for failure of VAT payments and submission of tax returns. 

The deferral shall not apply to businesses with certain economic activities 

The Department of Registrar of Companies and Official Receiver

The Department of Registrar of Companies and Official Receiver issued the following announcement on 23 March 2020: 

  • The publication in the Cyprus Gazette of the three-month notification preceding the delisting (strike-off) of non-compliant companies is suspended until January 2021.
  • The payment of the annual levy of €350 for the year 2020 is extended until 31 December 2020 without imposition of the additional 10% and 30% charges.
  • The introduction of the administrative penalties for late filings of notifications (e.g. HE2 Change of Registered Address, HE4 Alterations of Officers and HE57 Transfer of Shares) will be postponed until 2021. 
  • The filing of annual returns (HE32) for the period 1 January 2020 until 31 December 2020 may be made until 28 January 2021 without the imposition of the €20 late fee. 

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