Indirect Tax News - May 2020

Temporary deferral of VAT payment in light of the COVID-19 situation

As a measure of relief in light of the COVID-19 situation, the government of Cyprus has deferred the obligation of VAT-registered businesses to remit VAT owing for the VAT periods ending February, March, and April 2020. As long as the taxpayer has submitted the relevant VAT returns by their due dates, there will be no additional penalty (10%) or interest (1.75%) on the deferred payments. For example, 10 April 2020 is the due date for submission of the VAT return for the period 1 December 2019 to 28 February 2020. The VAT amounts due for that period may be paid in instalments until 10 November 2020 without incurring any penalty or interest.

The above arrangement does not apply for certain categories of businesses that remain open as per the government’s 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.

Angelos Petrou