VAT reduction in Cyprus
Countries around the world are implementing emergency tax measures to support their debilitated economies during the coronavirus COVID-19 threat. In light of the business disruption caused by COVID-19, the Cyprus government has announced a number of measures to support the country’s economy. Finance Minister Constantinos Petrides has clarified that the temporary measures fall under the general financial support package against the coronavirus impact on businesses.
- A temporary two-month suspension of payment of VAT without the imposition of penalties as a measure to enhance liquidity for businesses. his measure would apply to businesses with turnover not exceeding EUR 1 million based on the VAT returns submitted during 2019, and businesses whose turnover has been reduced by more than 25%. It is noted that arrangements will be made so that VAT due amounts will be settled gradually by 11 November 2020.
- The further drop in the reduced VAT rate from 9% to 7% for a period of three and a half months.
- The standard VAT rate is temporarily reduced from 19% to 17% for a two-month period and this concerns most consumer products such as shoes and electrical appliances as well as services such as telephony.
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