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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case CY-2021-1/1831 – measures in Cyprus

State sponsorship scheme for certain categories of non-VAT registered businesses and self-employed persons

Σχέδιο ειδικού επιδόματος ορισμένων κατηγοριών επιχειρήσεων και αυτοτελώς εργαζομένων οι οποίες δεν είναι εγγεγραμμένες στον μητρώο ΦΠΑ

Country Cyprus , applies nationwide
Time period Open ended, started on 01 January 2021
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Loucas Antoniou (INEK) and Eurofound
Case created 09 April 2021 (updated 05 May 2021)

Background information

The scope of the measure is to provide financial support to certain categories of businesses and self-employed persons that are not registered in the VAT registry and have been negatively affected by the pandemic and the measures taken by the government against the spread of coronavirus COVID-19 in the community. The financial support provides the covering of running or operational costs of businesses such as rentals of business units, debts instalments or other business operational costs. The scheme is approved by the Cabinet in January 2021 and regulated by the Ministry of Finance.

Content of measure

Beneficiaries of the scheme are businesses and self-employed persons that are not registered in the VAT registry because the value of their annual taxable transaction is less than €15,600 and have been negatively affected by the pandemic. The scheme covers the following establishments:

  • Registered Private institutes (i.e., language schools), according to the ‘Private Schools and Private Institute Law’ (1971)
  • Dancing schools
  • Conservatories/music schools, and
  • Other agencies with similar activities.

The beneficiaries of the scheme will receive a sponsorship equal of the 50% of the monthly allowance that they receive from the Special Scheme of Certain Categories of Self-employed of the Ministry of Labour, Welfare and Social Insurances.

Use of measure

Currently, there is no information on the number of establishments eligible to receive the sponsorship or the effectiveness of the measure.

Target groups

Workers Businesses Citizens
Does not apply to workers SMEs
Other businesses
Does not apply to citizens

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The sponsorship scheme actually emerged after the reactions of social partners – trade unions, employers’ organization, SMEs – and political parties at a national level to earlier measures of the government directed to businesses, which were considered inadequate. The covering of operational costs of businesses was a demand of social partners since the first wave of the pandemic in 2020, which influenced a public debate among them and the government. Social partners at the peak level participated in the designing phase of the scheme thought the implementation and monitoring is regulated by the Ministry of Finance.

Views and reactions

Social partners appeared satisfied upon the announcement of the scheme by the Ministry of Finance. Some reactions have been also observed mainly by the leading opposition party suggesting that the rental of businesses units, particularly for SMEs that have negatively affected by the pandemic, which represents a large percentage of the operational costs of businesses should be subsidised separately and directly by the government.

Sources

  • 01 February 2021: Έναρξη καταβολής κρατικής χορηγίας σε επιχειρήσεις και αυτοτελώς εργαζομένους (mof.gov.cy)
  • 07 April 2021: Το ΑΚΕΛ εντείνει την πίεσή του προς την κυβέρνηση για τα ενοίκια (dialogos.com.cy)

Citation

Eurofound (2021), State sponsorship scheme for certain categories of non-VAT registered businesses and self-employed persons , case CY-2021-1/1831 (measures in Cyprus), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.