The two bills for the provision of tax reliefs to business owners, who will make voluntary rent reductions for the period between January – March 2021 to companies that have suspended their operations due to the pandemic prevention measures, were presented before the Parliament.
The two bills amend the Income Tax Law and the Extraordinary Levy Law for the Defense of the Republic and are expected to be discussed in the parliamentary Finance Committee and then brought before the Plenary. According to the explanatory report accompanying the first bill, the purpose of the amendment is to provide tax credit to landlords who rent real estate to natural or legal persons whose operation has been suspended, as an incentive to voluntarily reduce the rent for a period up to three months (1 January to 31 March). As clarified, the tax credit to be granted is equal to 50% of the amount of rent reduction, which reduction does not exceed 50% and is not less than 30% of the monthly rent.
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The purpose of the second bill is the exemption of the special contribution for the defense to landlords who will voluntarily reduce the rent in any month during the period January – March, in companies whose operation has been suspended, again meaning that the reduction is between 30% and 50% of the monthly rent. The above incentives were announced on January 9 by the Minister of Finance and complemented two other measures to support tenants which came into force under the Insect Cleanup Act.
This is a two-month suspension of the payment of 70% of the rent for professional leases of companies and independently who are under the decrees in suspension of work, regardless of whether they offer delivery or take away services, provided that this amount will be paid by February of 2022. The second measure concerns the non-payment of rents to the state and Public Law Organizations by tenants for two months (January-February or February-March) again for companies that are suspended. As it was clarified on the subject, with a new decree the non-payment of rents also applies to companies and self-employed employees who rent premises from the Turkish Cypriot Property Management Service.
