Andersen Legal in Greece

Covid – 19: Cyprus’ legislative enactments

Date: March 31, 2020

On the 27 March 2020 and 29 March 2020 respectively, the House of Representatives approved a bundle of bills for boosting of the economy in an attempt to endure the fallout from the pandemic crisis.

 In a closed-door session, 21 out of 56 MPs attended and 10 bills were summarily passed in one go after having been discussed by the House Finance Committee via teleconferencing.

In short, the bundle includes a supplementary budget of around €370 million designed for supporting workers, vulnerable groups and business affected by the crisis. Included are €182 million allotted for a scheme to fund the wages of some 220,000 private sector workers if businesses fully or partially suspend their operations.

1.VAT measures and GHS contributions

Reduced contributions to the General Healthcare System

 The payment of reduced contributions to the GHS will be effective as from the 1st April 2020 until the 30th June 2020.

 On the basis of an announcement made by the Ministry of Finance, it is clarified that in the event where businesses/employers have applied the reduced rates during the month of March 2020, then, for these cases only, the period for applying the reduced rates is set between the 1st March 2020 until the 31st May 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





–  Employees

–  Pensioners

–  Income Earners

–  Persons holding an office




B) Employers 2,90 1,85 2,90
C) Self-employed individuals




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




E) The Republic 4,70 1,65 4,70

The Measures

 The actual amendments to the legislation are made to the sections that impose penalties and interest. Specifically, the imposition of penalties and interest (including penal penalties) are waived with regards to the payment of any due VAT for the VAT quarters ending:

  • 29 February 2020 (due 10 April 2020)
  • 31 March 2020 (due 10 May 2020)
  • 30 April 2020 (due 10 June 2020)

but only if

  • The VAT declaration is submitted by the due date, and
  • Any VAT payable is paid by 10 November 2020.

We note that the penalty for the late submission of the VAT return will continue to apply and will continue to constitute a penal offence. The application of the amendments does not apply to certain categories of businesses as follows:

  • Producers of electricity
  • Collection and distribution of water (for water supply)
  • Groceries and supermarkets that are mainly for food
  • Convenience stores and mini markets
  • Retailing of a variety of goods in department stores where food, beverages and tobacco are not predominant
  • Retail of fruit and vegetables – fruit shops
  • Retail sale of meat and meat products including poultry
  • Retail sale of fish and seafood-fish and molluscs
  • Retail sale of bread, other bakery and confectionery products
  • Retail sales of fuel
  • Retail sale of computers, peripherals and software
  • Retail sale of books
  • Retail sales of newspapers and stationery
  • Retail sales of toys of all kinds except video games
  • Pharmacies
  • The Cyprus Telecommunications Authority (CYTA)
  • Internet services
  • Satellite telecommunications services
  • Other telecommunication services, besides CYTA

The previous announced limit of such measures to businesses with a turnover of less than €1m or businesses that have suffered a reduction in turnover of more than 25%, have been removed. A reduction in VAT rates that had been initially announced has also been abandoned for now.

2. Special leave for childcare / Employee support

 Granting ‘Special Leave’ to parents working in the private sector for taking care of their children up to 15 years of age due to suspension of schooling, public and private, in nurseries and kindergartens.

The following allowance will be given for this “special leave” which, at this stage, can last up to 4 weeks and which does not include public holidays:

For a parent with a salary of up to €2,500: for the first €1,000 of the parent’s salary a ‘special leave’ allowance of 60% of the salary will be paid and for the subsequent €1,000 of his / her salary, a 40% allowance will be paid. It is noted that in the case of single-parent families, the rate of payment of the benefit varies between 70% and 50% respectively.

This special leave is granted to one of the two parents and if one parent receives this leave, the other cannot receive the same leave simultaneously. Also, if one parent works / receives unemployment benefit / participates in a Work Suspension Plan and the other does not, the working parent is not entitled to it unless the parent who is not working has himself or herself been infected with the virus or is hospitalised or is a disabled person, or is a person subject to compulsory restriction.

The aforementioned special leave granted to parents for the purposes of childcare will be granted if the nature of their work does not allow teleworking or working from home or flexible working hours and if there is no internal assistance. This does not include grandparents. This leave is granted in consultation with the employer and upon the submission of a relevant application to this end.

The said leave applies to parents of persons with disabilities and there is no age limit, as stated above (i.e. 15 years of age) provided that no care allowance is granted for such persons.

The period of special leave is considered as a period of equivalent insurance. This means that all rights and entitlements that a parent has, will remain the same as if they were working.

In relation to the public sector, employees that are deemed by their respective ministers (according to which ministry they work in) that they need to go to work, but, however, there is a need for them to stay home to take care of  their children, will need to consult with their superior so that arrangements are made for their substitution.

3.Partial Suspension of business operations & Support Scheme

In the support Scheme for the partial suspension of business operations, any business that has partially suspend its activities and business can enroll. Such business must show a reduction in its turnover of over 25% during the month of March 2020 and foresee a respective reduction for the month of April 2020.

The basic requirement for participation in the Scheme is that no employee should have been fired since 1 March 2020 and if the application for participation is approved, no employee should be dismissed for both the period of the businesses’ participation in the Scheme as well as for an additional period equal to the period of participation in the said Scheme, plus 1 additional month (except for dismissal for reasons justifying such, without notice). It goes without saying that businesses will not be able to dismiss employees for financial reasons during the above period.

Participation in the Scheme is done by applying online and submitting the relevant form via the Ministry’s website The application must be made and submitted by an individual authorised to bind the business according to the relevant applicable law.

Businesses that employ up to 50 employees may participate in the Scheme and declare 75% of the total number of their employees for the provision of payment of the Special Unemployment Benefit. Businesses that employ over 50 employees may participate in the Scheme and declare 60% of the total number of their employees so that the payment of the Special Unemployment Benefit is paid.

No Special Unemployment Benefit is provided to directors, shareholders and partners holding more than 20% of shares, general managers and executives of businesses that participate in the Scheme, that either fall into 25% or 40% of staff, depending on the case. If, however, these persons exceed 25% or 40% of the employees then, they may be included in the Scheme and the Special Unemployment Benefit be paid.

For businesses that will participate in the Scheme, the employer has the option to employ staff receiving the Special Unemployment Benefit and paying the balance of the employee’s salary as well as the social insurance contributions that correspond to the balance paid by the employer. The employee’s salary may differentiate according to the working hours, provided that the employee consents.

If an employee to whom the Special Unemployment Benefit is to be paid to and if the employee so wishes, such employee can work at the company with payment of the difference between the Special Unemployment Benefit and his or her salary or if the employee consents, by changing the above difference according to the respective hours of work.

The terms and conditions as well as the mode of calculating the Special Unemployment Benefit for employees is as follows:

  • For employed persons who meet the social insurance conditions in relation to the Unemployment Benefit according to the Social Insurance Law, is at 60% of the value of such units according to the aforementioned law.
  • For employed persons who do not meet the above conditions according to the said law and who are insured with the Social Insurance Fund in January 2020, the January 2020 salary will be taken into account (insured earnings) or the previous salary (insured earnings) for which there is data in the registry of the Social Insurance Department and thus, the Special Unemployment Benefit will be paid under conditions and the amount of which will be set by the issuance of a subsequent decision.
  • The maximum amount that may be paid as Special Unemployment Benefit for a 1-month period cannot exceed €1.214,00.

The Scheme does not apply to public organisations and to the broader public sector, public legal organisations and organisations of similar nature and other economic activities that have not, de facto, suffered a reduction in their turnover, in particular:

  • Supermarkets
  • Any other companies that supply food
  • Trading of fruit, vegetable, meat and fish
  • Satellite and other telecommunication activities
  • Production of electrical power
  • Collection and management of waste
  • Financial and insurance activities, including licenced banking institutions
  • Veterinary activities
  • Doctors (excluding dentists)
  • Hospitals
  • Old age homes
  • Production of pharmaceutical preparations
  • Wholesale trading of pharmaceutical products
  • Pharmacies
  • Trading of medical and orthopaedic supplies

 4. Suspension of loan repayments

 Loan repayments (includes the principal amount and interest chargeable thereupon) for performing loans are suspended until the end of the year.  Non-performing loans are not covered.

The suspension begins on the date when the relevant written application is submitted with the banking institution, subject to the applicant fulfilling certain criteria.

5, Other measures

  • Tax breaks for businesses. The Department of Taxation announced that the deadline for submissions of Income Tax Returns for Companies and Self – Employed persons for the tax year 2018 are extended from the 31st of March 2020 to the 1st of June 2020.
  • A ban on evictions for tenants not paying their rent until the 31 May 2020.
  • A €300 spot fine for people contravening the quarantine orders issued by the Minister of Health.
  • Teleconferencing as a lawful process to hold meetings and make decisions.
  • Curfew: Special SMS and forms are completed for those individuals still working in order to travel to their place of work. After 18:00 no moving around is permitted unless for exceptional circumstances (e.g. going to supermarkets, pharmacies etc). From 21:00 until 06:00 no movement is allowed.


The information provided in this article is for general information purposes only. You should not rely on this material or information as a basis of making any business, legal or other decision. It is advisable to seek proper legal and or tax advice prior to entering into any transaction or relationship.

Andersen Tax, Cyprus 2020