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Cyprus

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Employment-related measures

(e.g. state compensation schemes, training…)

Exemption from paying General Healthcare System Contributions for a period of three months under the Program for Financial Support to counter the economic impact of COVID-19 disease

  • Under the Program for Financial Support to counter the economic impact of the COVID-19 disease, approved by the House of Representatives on 27/3/2020, and more specifically, the decision to exempt from payment of the increase GHS contribution for a period of 3 months, the rates of the GHS Contributions are set as follows:
Employment-related measures
  • In the event where businesses/employers have already proceeded in the implementation of the reduced rates for March 2020, the 3-month period applies from 1 March 2020 to 31st May 2020 for those businesses/employers only. In the event where the reduced rates have not been applied for March 2020, the 3-month period applies from 1 April 2020 to 30 June 2020.

Start-ups:

  • Small Business Support Scheme provides for a subsidy of 70% of employee salaries.

Economic stimulus measures

Start-ups

  • All performing business and public loans (capital and interest) will be frozen for nine months.
  • A state guarantee of €2billion for businesses and self-employed: Any losses from these loans will be covered to 70% by the government and to 30% by the banks.

Other measures and sources

Suspension of the collection of loan installments and interest

  • Under the Emergency Measures by Financial Institutions and Supervisory Authorities Decree of 2020, dated March 30, 2020, all licensed banks in Cyprus are ordered to suspend the collection of loan installments, including interest, until the end of the year, subject to the borrower submitting a written request to this end and no default amounts to have existed, on the relevant loans, over 30 days past due as at 29 February 2020. Under the scheme, the sum of the suspended installments on the principal, as well as the interest for the period in question, will not be immediately due on December 31st 2020, but the loan duration will be suitably extended to accommodate the suspension.

Central Bank of Cyprus Guidelines to Banks

  • The Central Bank of Cyprus has issued guidelines to banks with respect to the provision of short-term liquidity facilities, of a duration of up to 12 months, at preferential terms (interest rate and other charges), to viable physical and legal entities which are facing financial difficulties as a result of the COVID-19 pandemic (generally defined as a reduction of at least 25% in turnover).  The additional liquidity facilities may be used to cover payroll cost, rentals, trade creditors etc. and may be for a maximum amount of up to two times the annual payroll cost or up to 25% of the entity’s (legal or physical) most recent annual turnover.

Special Plan for a Full Suspension of Business or Partial Suspension of Operations

  • Within the framework of the emergency measures taken by the Ministry of Labor, Welfare and Social Insurance in response to the COVID 19 pandemic virus Act 2020 and aiming to support both private sector’s and businesses’ employees, the Special Plan for a Full Suspension of Partial Suspension of Business Operations and the payment of a Special Unemployment Benefit to private sector’s employees come into force, provided they abide to certain Terms and Conditions.

Special Self Employee Benefit.

  • In the context of the emergency measures taken to cope with the COVID 19 Pandemic contained within the legislation enacted during 2020 and to support self-employed persons, the "Self-Employed Special Benefit" shall be provided in accordance with the terms and conditions set out in this Decision. 

Child Care Special Leave

  • Within the content of the Emergency Measures Taken to Cope with the COVID 19 Pandemic Act 2020 aiming at supporting employees responsible for the care of children up to 15 years of age and/or children with disabilities of all ages the "Child Care Special Leave" allowance is granted in accordance with certain terms and conditions. The Child Care Special Leave Allowance will be awarded to working parents who are responsible for the care of children up to 15 years of age and / or children with disabilities of any age and due to the nature of their work cannot work either by teleworking or working from home or with flexible working hours provided there is no in-house assistance.

Start-ups

  • Reduction of electricity prices by 10% for two months

Main sources of information

Contact us

Tax: George Markides – george.markides@kpmg.com.cy
Restructuring: Renos Ioannides – renos.Ioannides@kpmg.com.cy
Legal: Michalis Loizides – Michalis.Loizides@kpmg.com.cy
Human Resource: Antonis Bargily – Antonis.Bargily@kpmg.com.cy