As part of measures to support companies facing liquidity problems due to the Covid-19 pandemic, the Ministry of Finance announced plans to allow partial monthly payments of VAT.
“It is in this context that the [finance ministry] have agreed with the proposal of the Democratic Alarm, as with the opening of the Parliament, to immediately submit a bill, which will include arrangements for not imposing any financial burden or interest on taxable persons, who have a VAT payable amount. in the tax return that concerns the tax period ending on 31/03/2021 with the date of submission and payment of the due VAT until 10/05/2021, i.e. in May,” Finance Minister Constantinos Petrides said in a statement published on Thursday.
The same will be done for June and July, the minister said, and this amount must be paid by the deadline for submitting the next tax return, i.e. by 10/08/2021.
Of course, it should be noted that in order for the above regulations to apply, tax returns must be submitted in a timely manner. “No fine will be paid to those who, because of the pandemic or because they are currently facing a liquidity problem, will not be able to pay their VAT debts on the Monday that the market opens,” Petrides added.
The amounts due must, however, be paid by 10/08/2021, 10/09/2021 and 10/10/2021, respectively.
In order for the above regulation to apply, each taxable person must submit his tax returns on time, ie by 10/05/2021, 10/06/2021 and 10/07/2021, respectively.
There is a list of 37 activities which may not take advantage of this extension; readers may find it below.
“This is a real help for companies that are struggling with liquidity challenges,” comments Savvas Klitou, director of Tax Services at Baker Tilly Cyprus.
“But we hope that the government will avoid issues that arose last year, when there were changes of scope and of dates, as well as to which companies were eligible for the scheme. The plan this year has been clearly set out, and if it is followed, it will be a boon to all businesses trying to survive the uncertainty of a crisis.”
Activities ineligible for the VAT extension
- Supermarkets and grocery stores
- Mines and Quarries
- Forestry and Logging
- Satellite and other telecommunications services
- Electricity generation
- Production of chemicals, products, metals and other non-metallic products
- Manufacture of medicinal products and pharmaceutical preparations
- Manufacture of electrical equipment, machinery and electronic equipment for medical and therapeutic use
- Repair and installation of machinery and equipment
- Water supply, wastewater treatment, waste management and related
- Financial and insurance activities, including licensed banking institutions and related activities
- Construction sector and construction related companies
- Wholesale trade related to the construction sector
- Wholesale of motor vehicles and motorcycles, as well as maintenance, manufacture and repair of motor vehicles and related activities and related businesses
- Commercial agents
- Wholesale of tobacco, perfumes and cosmetics, furniture, carpets, electronic and telecommunications equipment & accessories, electrical household appliances, radio & television, PCs, computer peripherals and software, porcelain, glassware and cleaning materials
- Non-specialised wholesale trade in food, beverages and tobacco
- Programming, computer and related activities
- Hospital Activities
- Nursing Homes
- Trade in medical, orthopedic items and pharmaceutical product
- Lotteries and newsagents
- Land and water transport, storage, postal activities
- Private health companies and clinical laboratories
- Home Assistance Activities and Household Activities as Domestic Employers
- Film production and related activities
- Funeral home activities and related activities
- Veterinary Activities
- Head office activities, management consulting and related activities
- Legal, accounting and architectural activities
- Gas Stations
- Real estate services
- Protection and research activities as well as service activities in buildings and outdoors
- Rental and leasing of personal or household goods, machinery and equipment