VAT Updates

Requirement to make VAT prepayments for certain categories of businesses

On 2 April 2020, the Council of Ministers issued a Decree requiring certain categories of taxpayers to make advanced VAT payments. The decree ΚΔΠ 145/2020, is limited to the categories of businesses that were excluded from the right to defer VAT payments pursuant to measures passed by Parliament on 27th March 2020. More information on these measures may be found in our recent update. A list of the VAT activity codes for these businesses are also provided in the table below for reference:

 

Activity codes/descriptions exempted from the deferred VAT payment concessions

 

Activity code

Activity description

1.

35111

Production of electricity

2.

36001

Collection and distribution of water for irrigation

3.

47111

Supermarkets and grocery stores

4.

47112

Mini markets

5.

47191

Department stores selling a variety of items of which there is no predominance in food products, beverages or tobacco

6.

47211

Retail sale of fruit and vegetables

7.

47221

Retail sale of meat and meat products, including poultry

8.

47231

Retail sale of fish and seafood

9.

47241

Retail sale of bread and bakery products

10.

47242

Retail sale of confectionary products

11.

47301

Retail supply of fuel

12.

47411

Retail sale of computers, peripheral hardware and software incuding video games

13.

47611

Retail sale of books

14.

47621

Retail sale of newspapers and stationery

15.

47651

Retail sale of toys other than video games

16.

47731

Pharmacies

17.

61101

Cyprus Telecommunications Authority (CyTA)

18.

61201

Internet services

19.

61301

Satellite services

20.

61901

Telecommunication services other than CyTA

The Decree provides that affected businesses, should conduct a payment of 30% of the payable VAT within 15 days from the end of each month, for VAT periods periods between 1 January 2020 until 31 May 2020. Further details on the method of payment will be notified by the issue of separate decree from the Minister of Finance, which is expected in the following days.

It is urged that taxable persons check their VAT registration certificate to determine whether they fall under the above scope and may therefore be subject to the relevant provisions.

Relief from duties and VAT on importation for goods essential to the prevention of the spread of COVID-19

The European Commission has addressed to Member States it’s decision of 3 April 2020 to grant relief from import duties and VAT exemption on importation of goods needed to combat the effects of the COVID-19. Eligible goods are those to be imported by or on behalf of State organisations including State bodies, public bodies and other bodies governed by public law or by or on behalf of organisations approved by the competent authorities in the Member States, and to be used free of charge by the persons affected by, or at risk from COVID-19, or involved in combating the COVID-19 outbreak.

The relief is also applicable on goods imported by or on behalf of disaster relief agencies to meet their needs during the period they provide disaster relief to the persons affected by, or at risk from COVID-19, or involved in combatting the COVID-19 outbreak.

The above measures apply to importations made from 30 January 2020 to 31 July 2020.