A new Cyprus Tax Incentive scheme for foreign employees was approved on May 10th, 2022 which aims to attract foreign companies to relocate their headquarters/offices to Cyprus and also to attract high-skilled foreign employees.
The new legislation in Cyprus, provides for the reduction of the minimum required annual salary from €100,000 to €55,000 regarding the 50% tax exemption for taking up employment in Cyprus.
This strategy aims to further boost the development of the technology sector, to enhance Cyprus’ position as a sustainable business and commercial centre, and to promote the island as a prime location for headquartering.
- For existing beneficiaries of the exemption (receiving at least €100,000 annual salaried income), the law provides for the 50% tax exemption if the annual remuneration from employment exercised in Cyprus is at least €55,000, provided that prior to the commencement of their employment in Cyprus they were abroad for 12 consecutive years. A grace period of six months for obtaining the benefit is provided, and the exemption will apply for 17 years from the commencement of employment (currently the exemption applies for 10 years).
- For new employees, the bill provides for a 50% tax exemption on remuneration from employment exercised in Cyprus by an individual who was abroad for 12 consecutive years, while eligible persons should earn at least €55,000 per year. The grace period to obtain the benefit for new employees will be set at two years. Similarly to existing beneficiaries, the exemption will be provided for 17 years from the commencement of employment.
If you wish to relocate to Cyprus, EuroAudit Ltd can advice and assist you with all financial, accounting, tax and legal matters pertaining in such a decision.