The European Commission has approved under the Temporary State Aid Framework a Cypriot aid scheme allowing for the deferral of VAT payments by companies affected by the COVID-19 pandemic.

Cyprus notified the Commission of a scheme that allows companies facing difficulties due to the COVID-19 outbreak to delay the payment of VAT due by April 10, May 10, and June 10, 2020. Under the scheme, no interest or penalties will be imposed on those companies, which pay the VAT due by November 10, 2020.

The Commission said that the scheme will be accessible to companies of all sizes and in all sectors, except those sectors which continued to operate during the lockdown in Cyprus. The aim is to ease the liquidity constraints faced by companies severely affected by the economic impact of the pandemic.