Further to the recent economic measures provided by the state to support local businesses and vulnerable groups during Covid-19, on 14 May 2020, legislators submitted a proposal to amend the Cyprus Companies Law (Cap.113). Members of parliament are now called to consider a drastic reduction, and in some circumstances the complete exemption, of the annual levy imposed on companies registered in the Republic of Cyprus for the year 2020.
If enacted, the legal obligation of active companies to pay annual levy, payable penalty-free by the new extended date 31 December 2020, will be reduced from the amount of 350 Euros to 40 Euros whereas ‘very small companies’ will be fully exempt as long as their records show that their balance sheet does not exceed the threshold of at least two of the following conditions:
i. Total asset worth of 700,000 EUR.
ii. Net turnover of 1,000,000 EUR.
iii. Average number of employees is three.
The purpose of this proposal is to alleviate the burdensome effects of Covid-19 on companies, together with the need to salvage small companies who would otherwise perish in the current economic crisis. Undoubtedly, the ratification of this proposal would further encourage the survival of local businesses and support the recovery of the Cypriot economy at large.
The author of the article is Anastasia Sarkisian.
Anastasia is a legal consultant at Royal Pine & Associates. She is qualified lawyer with experience in the corporate field and admitted member at the Cyprus Bar Association.
* This publication has been prepared as a general guide and for information purposes only. It does not purport to be comprehensive or to render legal advice.