Announcement by the Ministry of Finance – New measures to support the economy to deal with the effects of the COVID-19 pandemic

The House of Representatives today approved two very important government bills as part of a plan to support the economy.

The first bill concerns incentives to reduce rents by granting a tax credit equal to 50% of the rent reduction when the landlord reduces the rent for a period of up to three months by 2020.

To become eligible for the tax credit, monthly rent reduction should be between 30% and 50%. In this way, the tenant benefits, and the owner is given a significant incentive to proceed with the reduction, while half of the reduction is shared by the taxpayer.

The government is urging landlords to take advantage of the incentive and government assistance, and to reduce rents on affected businesses due to the pandemic, both for the profitability of the businesses from which they earn their income and for the prospect of economic recovery in general. 

It is noted that in addition, the Government has promoted legislation to ban evictions for a period of two months, which has been extended until September with the relevant bill.

The second bill concerns the support of businesses and professionals in the tourism sector for Cyprus, as well as the credibility of Cyprus abroad as a tourist destination.

The regulation concerns the concession to organized travel organizers, hotel companies, cruise companies, as well as car rental companies, of the legal right to issue credit notes (vouchers) in case of cancellations due to the pandemic.

There are also provisions for the issuance of state guarantees for the benefit of companies in case of insolvency, which assures the visitor, the Cypriot traveler, or the travel agent that he will not be harmed in case of insolvency of the Cypriot company with which he has made the reservation.

The amount of guarantees that the Government can grant is € 86.6m.

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