Further to our previous newsfeeds on this, on 1 November 2022 the Cyprus Tax Department issued Tax Circular 10 of 2022, providing clarifications and examples on how the exemptions are applied in practice.
The Circular examines the term “First Employment” and explains that an individual is not considered to have a first employment or ceases to be considered to have a first employment in the following cases:
However, the individual will be considered to maintain first employment if the other employer is a member of the same consolidated group for accounting purposes as the first employer.
Nevertheless, when the other employers are members of the same consolidated group for accounting purposes as the first employer, the related employments are also considered as first employment and the exemption is granted on the remuneration from those other employments as well.
“Occasional Employment” is interpreted as any full-time or part-time employment exercised in Cyprus under one of the following conditions:
without a contract and with the total duration of the employment not exceeding 120 days.
Remuneration from Employment
“Remuneration from Employment” covers any income or benefit (including benefits in kind, allowances, performance bonuses, etc.) from salaried services offered in Cyprus as specified in the relevant provisions of the Income Tax Law, but does not include the following:
It is noted that remuneration from salaried services offered outside Cyprus by a person resident in Cyprus, who is employed by an employer resident in Cyprus or by a permanent establishment in the country of a foreign employer (such services are subject to Income Tax since they are not offered to a foreign employer), constitutes remuneration from employment in Cyprus.
However, where a person receiving remuneration from employment in Cyprus and at the same time receives remuneration as Executive Director in the same company or another company belonging to the same consolidated group for accounting purposes, his remuneration from holding of office is also considered as remuneration from employment.
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.