In brief
On 15 December 2020 amending law No.7, which amends Article 8(21) of the Cyprus Income Tax Law, was published in the Cyprus Government Gazette.
In detail
On 15 December 2020 amending law No.7, which amends Article 8(21) of the Cyprus Income Tax Law, was published in the Cyprus Government Gazette.
Article 8(21) grants a five-year exemption from income tax of the lower of:
- 20% of the remuneration arising from employment in Cyprus, or
- EUR 8.550,
or persons that were not tax resident in Cyprus prior to the year of commencement of their employment; the five-year exemption begins in the year that follows the commencement of their employment in Cyprus; before the amending law, the last year of exemption was 2020.
The amending law extends the availability of the exemption up to employment that commences in 2025.
The amending law has not extended the duration of the exemption that an individual can enjoy, i.e. the duration of the exemption for an individual remains five years, e.g. a person commencing employment in Cyprus in 2025 will be eligible to claim the relevant tax exemption for 2026-2030.
The takeaway
The said extension safeguards the attractiveness of Cyprus, therefore Cyprus is expected to continue attracting overseas employees to commence employment in Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
