Further to our previous newsfeeds on this, the Council of Ministers approved on 10 May 2022 the significant improvement of an incentive aimed at attracting foreign companies and highly skilled staff to Cyprus.The incentive also seeks to repatriate Cypriot professionals who are currently living and working abroad.
The ultimate aim of this amendment is to give yet one more motive to existing and potential international groups and companies to establish and/or expand presence in and transfer their headquarters to Cyprus. The government also hopes that the change will further promote the technology sector in Cyprus, following the establishment of many high-tech, gaming and other international enterprises in the country over the last few years.
The existing Income Tax exemption of 50% for people moving to Cyprus for employment, earning at least €100,000 per annum, will be amended by reducing the threshold to €55,000 per annum.
Furthermore, the time period for which the tax break would be applicable will be extended from 10 years, for which it is currently applicable, to 17 years.
The exemption commences during the first year of employment in Cyprus.
Moreover, the improved terms will also apply retroactively to existing eligible persons earning more than €55,000 per annum, provided that they resided abroad for 12 consecutive years before moving to Cyprus to work.
A grace period of two years has been announced for new employees, as well as a period of six months for existing staff, for qualifying with the criteria of the scheme. This is relevant where an employee’s initial remuneration is below the threshold of €55,000 per annum.
As always, we are at your disposal for any further information or clarification and for discussing any specific enquiries, concerns and thoughts you may have.