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EY Cyprus COVID-19 Updates

Announcements made by the Social Insurance Department, Registrar of Companies and Official Receiver regarding COVID–19

SOCIAL INSURANCE

Payment arrangements regarding the contributions to the Social Insurance Fund and to other funds administered by the Social Insurance Department

The Ministry of Labour, Welfare and Social Insurance announced yesterday (26/03/2020) that it has made all the necessary arrangements for the payment of the current contributions to the Social Insurance Services through the JCC Smart application / website (https://www.jccsmart.com/).

It is noted that the option of paying contributions to the Social Insurance fund, as well as to other funds administered by the Social Insurance Department, is available through the JCC Smart application / website as of today Friday 27/03/2020. As already stated in the relevant announcement of the Ministry of Labour, Welfare and Social Insurance, in addition to the payments through JCC Smart, all the employers are required to submit the "Remuneration and Contribution Statements (Form YKA2-002)" in the boxes located at the local District Offices and Branches of the Social Insurance Departments in order to enable the remuneration of all the employees to be recorded.

It is understood that employers who submit data by using usb, cds, etc should submit these, together with the form "Remuneration and Contribution Statements (Form YKA2-002)", in the boxes located at the local District Offices and Branches of the Social Insurance Departments. Alternatively, YKA2-002 forms along with the usb and cds can be mailed to the local District Offices and Branches at the following addresses:

➢ District Office of Social Insurance Department Nicosia, Athalassas Avenue 56, 1466 Strovolos, Nicosia.

➢ Branch Office of Social Insurance Department Αgiou Andrea, Navarinou 11, 1100 Nicosia.

➢ District Office of Social Insurance Department Limassol, Franklin Roosevelt Avenue 80, 3012 Limassol.

➢ District office of Social Insurance Department Larnaca, Filiou Tsigaridi 1, 6023 Larnaca.

➢ District Office of Social Insurance Department Paphou, Filiki Etairia 1, 8047 Paphos.

➢ District Office of Social Insurance Department Famagusta, P.O. 36007, 5385 Derynia.

It is important to note that the deadline for the payment of the contributions to the Social Insurance Fund, as well as to the other funds managed by the Social Insurance Department for February 2020, is by 31 March 2020.

We further note that this arrangement aims to avoid the massive attendance of the public to the Social Insurance department and to safeguard public health.

Finally, it is also important to note that the Social Insurance Department encourages those who have access to the Social Insurance Services' online payment system to make the relevant contributions through this system.

REGISTRAR OF COMPANIES AND OFFICIAL RECEIVER

The Registrar of Companies and Official Receiver issued an announcement in relation to measures for helping companies affected by COVID-19.

Strike-off of companies with delayed submissions of Annual Returns (ΗΕ32):

In recent months, the Registrar of Companies and Official Receiver (“Registrar”) has sent reminder letters to many companies for the submission of overdue Annual Returns (form HE32). The letters issued were requesting Annual Returns up to and including the year 2018 to be submitted within 6 months from the date of the letter otherwise the said companies would face involuntary strike-off by the Registrar according to Article 327 of the Companies Law cap.113. As per the announcement of the Registrar the deadline for the companies to comply with the letters sent is extended until January 2021. It is also specified that for companies that fail to meet the revised deadline, an announcement will be placed in the Official Gazette of the Republic of Cyprus giving a 3 months’ notice according to the Law to all interested parties that the company will be struck-off the Register at the expiration of such official notice.

Payment of the annual levy of €350:

On an annual basis, Cyprus companies must pay an annual levy of €350 by 30 June of the said year. Payment of the annual levy is possible after that date with a 10% penalty if made within 2 months of the 30/6 deadline increasing to 30% if payment is further increased up to 5 months after the 30/6 deadline. As per the announcement of the Registrar, the deadline for settlement of the annual levy for the year 2020 is extended to 31/12/2020 without the imposition of any penalties. Penalties for late submissions: The application of late filing penalties for any forms and other submissions to the Registrar which was due to be implemented starting from 18 April 2020, is deferred to 2021. Filing of the Annual Return (HE32) for the year 2020: The Annual Return with a compilation date between 1/1/2020 and 31/12/2020 (i.e. the Annual Return for the year 2020) can be filed to the Registrar until 28/1/2021 without the application of a late filing fee of €20. EY Cyprus is at your disposal for any information and/ or clarifications required.

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

For additional information with respect to this Alert, please contact the following:

Petros Liassides

Partner, Tax Services

Tel: +357 22 209 797

Petros.Liassides@cy.ey.com

 

Christoforos Socratous

Partner, Tax Services

Tel: +357 22 209 738

Christoforos.Socratous@cy.ey.com

 

Herodotos Hadjipavlou

Assistant Manager, Direct Tax Services

Tel: +357 22 209 788

Herodotos.Hadjipavlou@cy.ey.com

 

 

 

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