Income Tax exemptions for Persons who Move to Cyprus for Employment - Clarifications by Tax Department

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.


First Employment

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:

  • When at any time in the past he/she had performed salaried services in Cyprus, which did not constitute occasional employment.
  • When he/she terminates the contract of first employment and enters into a new contract with another employer.

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.

  • When the employee has a second or more employments with other employers that run parallel to the first employment. In such a case, the individual will be eligible for an exemption only on the remuneration from the first employment.


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:

  • under a contract of a total duration (including any renewals and periods during which the individual could have performed his duties outside Cyprus) not exceeding 120 days; or
  • without a contract and with the total duration of the employment not exceeding 120 days.

Any probationary period that may be provided for in employment contracts, constitutes part of the relevant employment.

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:

  • Any income or benefit from salaried services offered by a person resident in Cyprus, which services are offered outside Cyprus to a foreign employer, whether these are exempted from Income Tax or not.

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.

  • Any income exempted from Income Tax as per article 8 of the Income Tax Law.
  • Income or benefit from holding of office.


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.

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