The European Commission has approved a 20-million-euro Cypriot value-added tax deferral scheme to support businesses affected by the coronavirus pandemic and the restrictive measures put in place to limit the spread of the virus.
A press release by Brussels on Tuesday said that the scheme was approved under the State Aid Temporary Framework. Under the scheme, the aid will take the form of deferrals of VAT with the exclusion of interest and penalties related to the deferred amounts.
The aim of the scheme is to enhance the liquidity of the beneficiaries and to help them continue their activities during and after the pandemic. The Commission found that the Cypriot scheme is in line with the conditions set out in the Temporary Framework.
The aid will be granted no later than June 30 and the payment of VAT will be deferred until no later than June 2023.
The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member-state, in accordance with the conditions set out in the Temporary Framework pertaining to European Union state aid rules.