Settlement of Overdue Social Contribution Law (SOSC Law) The purpose of the amending Settlement of Overdue Social Contribution Law is to amend Article 7(3) of the SOSC Law so that individuals and companies who have regulated the payment of their overdue social contributions in instalments, can defer relevant payments that are due for the months of March and April 2020 by extending the agreed repayment period by two months. 

VAT Law

Subsequent to the initial announcement of various VAT measures, the final shape of amending VAT legislation provides for temporary VAT payment deferral to 10 November 2020 applicable for:

• The majority of entities (except from the list of sectors that have been expressly excluded in the amending law) regardless of turnover volume, total outputs or their respective decreases;
• VAT quarters December 2019 – 29 February 2020, January – March 2020 and February – April 2020;
• As long as those entities timely submit their VAT returns for the above quarters i.e. by 10 April, 10 May and 10 June 2020 accordingly.

The aforesaid deferral suspends additional 10% tax penalty, interest and criminal sanctions on VAT payable for taxable persons promptly submitting their VAT returns and arrange settlement by 10 November 2020.

Major Excluded Sectors (see accompanying economic activity coding found in VAT Registration Certificate for confirmation) from VAT payment deferral:

• Electricity Production & Water Distribution (35111 & 36001)

• Groceries – Food supermarkets & Kiosks – Mini-market (47111 & 47112)

• Pharmacies (47731)

• Retail multi-stores where food, drink, smoking items not predominant (47191)

• Internet & Satellite & telecommunications Services (61201,61301,61901)

• Retail Computing, peripheral and software trading (47411)

• Retail Fuel trading (47301)

All Excluded Economic Activity codes from VAT payment deferral:

35111, 36001, 47111, 47112, 47191, 47211, 47221, 47231, 47241, 47242, 47301, 47411, 47611, 47621, 47651, 47731, 61101, 61201, 61301, 61901. Proposed legislation on VAT rates reduction was withdrawn

How EY Cyprus can assist

Our Specialist Teams are at your disposal to examine entity specifics and provide assistance with:

✓ Impact Assessment of the measures and facilitation with Tax - VAT implementation.

✓ Supporting Tax - VAT treatment in software platforms, contractual employment agreements – terms, internal policies and accounting records.

✓ Structuring your entity Tax – VAT affairs in an efficient and compliant manner escaping from unnecessary leakages.

EY Cyprus will host a webcast analysing the COVID-19 fiscal measures. In case of interest, feel free to register here.