Measures to tackle the effects of COVID-19

March 20, 2020 News

Ελληνική Έκδοση

UPDATED 30/03/2020

We outline below our final interpretation in regards to the measures announced by the Government of the Republic of Cyprus till today to assist the business and the Economy of Cyprus in order to tackle the effects of COVID-19. We are anticipating that additional measures will be taken by Cyprus Government Authorities.

VAT

  • Temporary extension of VAT payments for the taxable periods of February, March and April up to the 10th of November 2020, provided that the taxable persons will submit their VAT returns on time.
    • There is no extension for the submission of VAT returns. For the abovementioned periods the deadlines are 10th April, 10th May and 10th
    • There is no turnover limit for the extension of the settlement of VAT, but the law excludes supermarkets, department stores, pharmacies, kiosks, petrol stations, bakeries, pastry shops, fish markets, fruit markets, computer stores and other businesses.

GESI – NHS

  • The increase in special contribution to the General Healthcare System for employees, employers and self-employees is suspended for three months for the period from the 1st of April to the 30th of June 2020. For this period the contributions will be made based on the initial rates (1.70% and 1.85% for employees and employers and 2.55% for self-employees). For March the contributions will be made based on the increased contributions (2.65%, 2.90% or 4%)

SUBMISSION OF INCOME TAX RETURNS

  • The deadline for the submission of the income tax return for the year 2018 by companies and self-employees that prepare audited financial statements, will be extended by two months from 31st March to 31st

SOCIAL INSURANCES

  • Self-employed individuals are granted one month extension to object in relation to their actual amount of insurable earnings from 31st March to 30th
  • The employers who are involved in repayment of late installments to social insurance contributions, the installments of March and April are suspended and the repayment period has been extended by two months.

SUSPENSION PLAN FOR BUSINESSES AND UNEMPLOYMENT SUBSIDIES FOR EMPLOYEES

  • Apply only for the Companies that mandatory fully suspended their operations in accordance with the decrees of Cyprus Government (for more information: pio.gov.cy/coronavirus).
  • For companies who employed up to 9 employees the unemployment subsidies will be available to all employees, including Directors.
  • For companies who employed more than 9 employees the unemployment subsidies will cover the 90% of the number of employees. The remaining 10% who will not be able to claim the unemployment subsidies, includes first the directors shareholders, or shareholders holding more than 20% of the shares, general managers and executives who earn salary from the Company. To calculate the number of employees that make up 90% of all employees, the result of the mathematical operation is rounded to the nearest whole number.
  • For the period for which the unemployment subsidies will be paid, the employer is exempt from the obligation to pay the wages and salaries to his employees who received the allowance as well as to pay the corresponding social security contributions.
  • The basic requirement in order to be able to participate in the above scheme is that the employer did not to fire any employee from 01st March 2020 and if the application is approved, any employee should not be dismissed both for the period of business participation in the Plan and for an additional period equal to the period of participation in the Plan, plus one extra month (except for reasons justified without notice).
  • The Company’s Special Suspension Plan is valid from 16.03.2020 to 12.04.2020, taking into account the dates of the Decrees of the Minister of Health or the decisions of the council of ministers on the compulsory full suspension of work and may have an earlier date of 16th March if the mandatory suspension decision was taken before 16th
  • Employees who before this decision were included in any other Suspension Plan (Such as Hotels and Catering Services) may, upon completion of the suspension period, be included in this plan.
  • In order to be able to participate in the scheme an electronic application (EEA.3 Form) must be submitted on coronavirus.mlsi.gov.cy by a person who commits the business in accordance with the relevant law. In this form the employer must mention the employees who will participate in the scheme.
  • The Unemployment subsidy is payable to the employees only if the employees submit the EEA.6 form “Declaration of Bank accounts details”. The relevant form can be found at coronavirus.mlsi.gov.cy.
  • The special unemployment subsidy for employees is calculated as follows :
    • For employees who qualify for unemployment benefit under the Social Security Act, at the 60% of the value of insurance units in accordance with the above law.
    • For employees who are not eligible under the Social Security Act and are insured with the Social Security Fund in January 2020, the January 2020 salary (insured earnings) or the last paid salary will be taken in to account for which there are evidence in the register of Social Security Services and a Special Unemployment Allowance will be paid subject to conditions, the amount of which will be determine by a subsequent Decision.
    • The maximum amount that can be paid as a Special Unemployment Allowance for a period of one month cannot exceed €1,214.
    • The special Unemployment Allowance is not provided for any period during which the employee receives other unemployment benefit, sickness benefit, special sickness benefit, special leave allowance or other similar benefits from the Social Security Fund.

PARTIAL SUSPENSION PLAN FOR BUSINESSES AND UNEMPLOYMENT SUBSIDIES FOR EMPLOYEES

  • Apply to businesses that have not mandatorily terminated their operations under the Decrees of Cyprus Government (for more information: pio.gov.cy/coronavirus), but they suffer 25% reduction in turnover in March 2020 and anticipate a corresponding reduction in the month of April 2020 compared to the corresponding period of the previous year. If the Company did not operate in the previous year then the comparison will be made with the months preceding March 2020.
  • The following enterprises are excluded from the scheme: Supermarkets, Any businesses that supplies food, Businesses that are trading fruits, vegetables, meats and fish, Satellite and other telecommunications services, Power generation, Waste collection and management, Financial and insurance activities, including licensed banking institutions, Veterinary Activities, Doctors (excluding Dentists), Hospital Activities, Nursing Homes, Production of pharmaceutical preparations, Wholesale of Pharmaceuticals, Pharmacies, Trade in medical and orthopedic supplies.
  • The scheme applies to all employees for businesses employing up to 2 people (including directors), up to 75% of the company’s employees for companies employing up to 50 employees and up to 60% for companies employing more than 50 employees.
  • The remaining 25% and 40% respectively who will not be able to claim the unemployment subsidies, includes first the directors shareholders, or shareholders holding more than 20% of the shares, general managers and executives who earn salary from the Company. To calculate the number of employees that make up 75% and 60% of all employees, the result of the mathematical operation is rounded to the nearest whole number.
  • For the period for which the unemployment subsidies will be paid, the employer is exempt from the obligation to pay the wages and salaries to his employees who received the allowance as well as to pay the corresponding social security contributions.
  • For companies who will join the scheme of the Partial Suspension Plan, the employer has the option of employing the staff who will receive a Special Unemployment Benefit. The employer will have the obligation to pay to the relevant staff the balance of their salary (the portion of salary not covered by the scheme) and the corresponding contributions to Social Funds. The portion of the salary may be differentiated if the employee consents to his / her working hours.
  • The employees who will be part of the scheme and receive the Special Unemployment Benefit, may continue to work, provided they agree to do so. The balance of their salary (the portion of salary not covered by the scheme) should be paid by the Employer based on the hours worked. The portion of the salary may be differentiated if the employee consents to his / her working hours.
  • The basic requirement in order to be able to participate in the above scheme is that the employer did not fire any employee from 01st March 2020 and if the application is approved, any employee should not be dismissed both for the period of business participation in the Plan and for an additional period equal to the period of participation in the Plan, plus one extra month (except for reasons justified without notice).
  • The Company’s Special Suspension Plan is valid from 16.03.2020 to 12.04.2020.
  • In order to be able to participate in the scheme an electronic application (EEA.4 Form) must be submitted on coronavirus.mlsi.gov.cy by a person who commits the business in accordance with the relevant law. In this form the employer must mention the employees who will participate in the scheme.
  • The Unemployment subsidy is payable to the employees only if the employees submit the EEA.6 form “Declaration of Bank accounts details”. The relevant form can be found at coronavirus.mlsi.gov.cy.
  • The special unemployment subsidy for employees is calculated as follows :
    • For employees who qualify for unemployment benefit under the Social Security Act, at the 60% of the value of insurance units in accordance with the above law.
    • For employees who are not eligible under the Social Security Act and are insured with the Social Security Fund in January 2020, the January 2020 salary (insured earnings) or the last paid salary will be taken in to account for which there are evidence in the register of Social Security Services and a Special Unemployment Allowance will be paid subject to conditions, the amount of which will be determine by a subsequent Decision.
    • The maximum amount that can be paid as a Special Unemployment Allowance for a period of one month cannot exceed €1,214.
    • The special Unemployment Allowance is not provided for any period during which the employee receives other unemployment benefit, sickness benefit, special sickness benefit, special leave allowance or other similar benefits from the Social Security Fund.

SUBSIDY SCHEME FOR SELF – EMPLOYED INDIVIDUALS

  • This scheme applies only for self-employed individuals who have completely suspended their operations under the decrees of Cyprus Government (information: pio.gov.cy/coronavirus) or have not fully suspended their work but have a 25% reduction in turnover in March 2020 and foresee a corresponding decrease in April 2020 compared to the corresponding period of the previous year. If the Company did not operate in the previous year then the comparison will be made with months preceding March 2020.
  • The following professions are excluded from the scheme: Pharmacologists, microbiologists and similar Doctors (Dentists are not included), Veterinarians, Pharmacists, Medical Device and equipment operators, Insurers, Insurance agents, kiosks, grocers, mini marketers and diary manufacturers.
  • Self-employed individuals will also submit the application for full or partial suspension plan for their employees.
  • For the period for which the special self-employee benefit will be paid, the self-employed individual is exempted from the obligation to pay contributions to the social security services.
  • The basic requirement in order to be able to participate in the above scheme is that the self – employed individual did not fire any employee from 01st March 2020 and if the application is approved, any employee should not be dismissed both for the period of the participation in the Plan and for an additional period equal to the period of participation in the Plan, plus one extra month (except for reasons justified without notice).
  • The Special Suspension Plan is valid from 16.03.2020 to 12.04.2020, taking into account the dates of the Decrees of the Minister of Health or the decisions of the council of ministers on the compulsory full suspension of work and may have an earlier date of 16 March if the mandatory suspension decision was taken before 16th
  • In order to be able to participate in the scheme an electronic application (EEA.5 Form) must be submitted on coronavirus.mlsi.gov.cy by the self – employed individual.
  • The special subsidy is payable to the applicant only if he submit the EEA.6 form “Declaration of Bank accounts details”. The relevant form can be found at coronavirus.mlsi.gov.cy.
  • The special benefit paid to beneficiaries is calculated as follows :
    • The weekly allowance will be equal to 60% of the weekly amount of the insurable earnings, under which the beneficiary was required to pay contributions to the social security fund for the fourth quarter of 2019.
    • The minimum amount that can be paid as an allowance is €300 for a four week period and a maximum €900 for a four week period.
    • The special benefit is not provided for any period during which the applicant receives other unemployment benefit, sickness benefit, special sickness benefit, special leave allowance or other similar benefits from the Social Security Fund.

EMPLOYMENT TERMINATION AND UNEMPLOYMENT SUBSIDIES

  • Businesses that will not submit an application for the special suspension plans, retain their right to terminate the employments for a number of employees.
  • In this case, employees who have lost their employment should send a fax and/or email to the District Labour Office only, REQUEST FOR UNEMPLOYMENT REGISTRATION, which should include the name and surname, No. ID or ARC, telephone contact and the name of the last employer. The registration will be completed when an officer of the labour department communicates with the relevant person. There is no need to do anything else, at least, at this point.

SPECIAL LEAVE FOR PARENTS AND SPECIAL DISEASE SUBSIDIES

Please find more information and the applications at www.coronavirus.mlsi.gov.cy.

 ANNUAL LEVY PAYMENT EXTENSION

The Payment of Annual levy of €350 is extended from 30 June 2020 to 31 December 2020 without any interest or penalty.

DECREE OF SUSPENSION OF LOAN INSTALLMENTS FOR 9 MONTHS

Borrowers (Companies, Self-employed and generally all individuals) can apply for a 9 month suspension for their bank loans. If the specific conditions are met then the suspension will be accepted. The loan instalments will not have to be repaid immediately after the temporary suspension and the loan repayment period will be extended.