The European Commission has issued a release announcing its approval of a EUR 33 million Cypriot scheme to ease the liquidity constraints of companies affected by COVID-19.
State aid: Commission approves €33 million Cypriot scheme deferring payment of VAT to support companies affected by coronavirus outbreak
The European Commission has approved a €33 million Cypriot aid scheme deferring VAT payments to ease the liquidity constraints of companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April and 8 May 2020.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: "The €33 million Cypriot scheme will allow the delayed payment of VAT by companies affected by the coronavirus outbreak. This will help businesses to address their immediate liquidity constraints and continue their activities in these difficult times. The Commission works in close cooperation with Member States to swiftly approve measures during these difficult times, in line with EU rules."
The support measure
Cyprus notified to the Commission under the Temporary Framework a scheme allowing companies facing difficulties due to the coronavirus outbreak to delay the payment of VAT due by 10 April, 10 May and 10 June 2020. Under the scheme, no interests or penalties are imposed on those companies that will pay the due VAT by 10 November 2020 instead. The total estimated budget of the measure is €33 million.
The scheme will be accessible to companies of all sizes and all sectors, except the sectors which continued to operate during the lockdown in Cyprus. The aim of the scheme is to ease the liquidity constraints faced by those companies that are most severely affected by the economic impact of the coronavirus outbreak, thus helping them continue their activities.
The Commission found that the scheme notified by Cyprus is in line with the conditions set out in the Temporary Framework. In particular, the support is granted before 31 December 2020, and the end date of the deferral is 10 November 2020, thus before the end date of 31 December 2022 defined in the Temporary Framework.
The Commission concluded that the Cypriot scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.
On this basis, the Commission approved the measures under EU State aid rules.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.