CYPRUS: COVID-19 VAT IMPLICATIONS

Apr 17, 2020 | COVID-19

CYPRUS– Update 29th April

Changes to VAT periods and deadlines

As per a VAT decree issued by the Cyprus Tax Department on 16th of April 2020 which is part of the COVID-19 Government measures for the Cyprus economy.

The following VAT returns reporting periods and respective deadlines would apply:

Normal VAT return period

New VAT return period

Submission Deadline for the new VAT return period

1/1/20 to 31/3/20

1/1/20 to 31/3/20

27/4/20

1/2/20 to 30/4/20

1/2/20 to 31/3/20

27/4/20

1/3/20 to 31/5/20

1/3/20 to 31/3/20

27/4/20

Thereafter the following monthly VAT return periods would apply up to 30/6/20:

New VAT return period

Submission Deadline for the new VAT return period

1/4/20 to 30/4/20

27/5/20

1/5/20 to 31/5/20

27/6/20

1/6/20 to 30/6/20

27/7/20

 

Source Credit – BDO Cyprus

CYPRUS– Update 21st April

Extended submission deadline of VAT returns and VAT payments

New VAT measures were taken by the Cyprus Council of Ministers in an attempt to counteract the negative impact of Covid-19 on the 16th of April 2020.Until the 16th of April two measures had been passed into law as follows:

1. The suspension of the VAT payment for the VAT quarter ending on the 29th of February 2020 which was due by the 15th of April 2020, to the 10th of November 2020, which was passed into law on the 27th of March 2020. 

This law exempts certain categories of businesses as follows:

Producers of Electricity Collection and distribution of water (for water supply)

Groceries and supermarkets that are mainly for food Convenience stores and mini markets• Retailing of a variety of goods in department stores where food, beverages and tobacco are not predominant Retail of fruit and vegetables – fruit shops Retail sale of meat and meat products including poultry Retail sale of fish and seafood-fish and molluscs

  • Retail sale of bread, other bakery and confectionery products
  • Retail sales of fuel
  • Retail sale of computers, peripherals and software including video games
  • Retail sale of books
  • Retail sales of newspapers and stationery• Retail sales of toys of all kinds except video games
  • Pharmacies
  • The Cyprus Telecommunications Authority (“CYTA”)
  • Internet services
  • Satellite telecommunications services
  • Other telecommunication services besides CYTA 

Consequently, the aforementioned businesses which are not considered to be impacted by the pandemic, are not eligible to the suspension of the VAT payment. They have to follow the provisions of the law and pay the relevant VAT on time.

2. On the 2nd of April 2020, the decree ΚΔΠ 145/2020 passed into law providing that certain businesses will be liable for monthly VAT payments of 30% of the vat due by the 15th day of each month, as a measure to boost the liquidity of the budget. On the 16th of April 2020 a new decree was published in the official gazette ΚΔΠ 170/2020 cancelling the previously issued decree (ΚΔΠ 145/2020) published on the 2nd of April 2020.

The new decree ΚΔΠ 170/2020, refers to specific businesses. It particularly mentions that only the businesses which have been notified by the Department of Taxation through the e-mail they have provided to Taxisnet, are affected. In a nutshell, the decree ΚΔΠ170/2020 provides for the following:

  1. Change of the duration of the VAT returns;
  2. Change of the deadline for submission of the relevant VAT returns to the 27th day following the end of each reporting period;
  3. Partial VAT payment for some businesses, by enabling them to only discharge 30% of the total VAT due as at the date of submission of each VAT return (i.e. 30% of the VAT due as per the current VAT return + 30% of the VAT due referring to previous VAT returns).

Change of the duration of the VAT returns and respective deadline for the submission of the VAT Return and payment of the VAT due

In particular, the duration of the VAT returns of the notified companies will change so as all affected companies to submit their VAT returns and pay the relevant amount of VAT due by the 27th of April 2020 as follows:

Usual VAT Return New VAT Period Last Submission date
1/1/2020 – 31/3/2020 1/1/2020 – 31/3/2020 27/04/2020
1/2/2020 – 30/4/2020 1/2/2020 – 31/3/2020 27/04/2020
1/3/2020 – 31/5/2020 1/3/2020 – 31/3/2020 27/04/2020

Thereafter, as from April, all affected companies to be liable to submit monthly VAT Returns until June 2020, by the 27th day of the month following the reporting month as follows:

New VAT Period Last Submission date
1/4/2020 – 31/4/2020 27/05/2020
1/5/2020 – 31/5/2020 27/06/2020
1/6/2020 – 30/6/2020 27/07/2020

 

Source Credit – Kinanis

CYPRUS– Update 17th April
The Cypriot Tax Authority has announced temporary extensions of VAT payment deadlines will be enacted for the majority of businesses. The previous turnover condition has been removed. It is necessary to submit VAT returns on time to benefit from the deferral and the payment of any deferred VAT must be made before 10 November 2020. The previously proposed VAT rate reductions have been withdrawn. The businesses that are excluded from the deferral include those involved in the retail of food, books and newspapers, computers and toys.  

Source Credit – Accordance VAT

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