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Tax and VAT measures voted following the Coronavirus outbreak

McMillan Cyprus > Articles > Articles > Tax and VAT measures voted following the Coronavirus outbreak
Tax and VAT measures voted following the Coronavirus outbreak article image

General Healthcare System (GHS) Law: Decreased GHS contributions for April, May and June 2020

As per the amending law, the contribution rates to the GHS that were applicable in the first phase (1 March 2019 to 28 February 2020), will also apply for the months of April, May and June 2020 (i.e. from 1 April 2020 until 30 June 2020).

The increased contribution rates to the GHS that are applicable from 1 March 2020 (as per the second phase), will apply for the whole of March 2020, and then from 1 July 2020 onwards.

The below table clarifies the period of application of the relevant contribution rates to the GHS per contributor’s category:

 

Contributor Category

March 2020

%

1 April 2020 –

30 June 2020

%

1 July 2020 onwards

%

A)– Employees

– Pensioners

– Income Earners

– Persons holding an office

2,65

1,70

2,65

B)Employers

2,90

1,85

2,90

C)Self-employed individuals

4,00

2,55

4,00

D)The Republic or natural/legal person responsible for the remuneration of Officers

2,90

1,85

2,90

E)The Republic

4,70

1,65

4,70

Law Regulating the Settlement of Overdue Social Contributions: Deferral of payments that are due for the months of March and April 2020

 The above law is amended so that the payment of overdue social contributions (including social insurance contributions) in instalments for the months of March and April 2020, for taxpayers who were included in a scheme (as at 1 March 2020) for their settlement, is suspended and the repayment period is extended by two months.

VAT Law: Temporary deferral of VAT payable

 The initial VAT measures (decrease in VAT rates) announced on 15 March 2020 have been withdrawn. The final VAT measures are reflected in the amending VAT law which provides for the deferral of the VAT payable amounts for the periods ending 29 February 2020, 31 March 2020 and 30 April 2020, until 10 November 2020.

The temporary deferral would apply provided that:

  1. The taxable person submits the relevant VAT return by the statutory due date, and
  2. the VAT payable amount for the above periods is settled by 10 November 2020.

As long as these conditions are satisfied, the following will not be applicable for the above mentioned periods:

  • additional tax of 10% on VAT payable amounts;
  • the annual interest of 1,75% thereof; and
  • criminal sanctions against taxable persons for failure of VAT payments and submission of tax returns.

The amending laws will be effective as of the date of their publication in the Official Gazette.

 

 

 

 

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