Based on the press release made by the Minister of Finance, the Cabinet of Ministers of the Republic of Cyprus approved, on the 10th of May 2022, a new tax incentive scheme aimed at attracting foreign talent to Cyprus and encouraging international companies to relocate their headquarters to Cyprus.
Currently, non-residents of Cyprus who take up employment in Cyprus and are paid more than €100,000 per year can benefit from a 50% tax exemption in respect of their employment income for the first 10 years of employment. With the newly introduced scheme the minimum required salary will be reduced from 100,000 to 55,000 euros per annum, while the duration of the 50% tax deduction will be extended from 10 years to 17 years from the date of commencement of employment. The scheme 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.
For existing beneficiaries of the exemption (receiving at least €100,000 annual salaried income), the scheme 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 scheme 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.
Furthermore, another scheme is expected regarding the granting of visas and work permits to spouses of professionals who opt to relocate to Cyprus, and regarding the operation of a One-Stop-Shop. Moreover, the above terms will also be applied retroactively to current eligible workers making more than €55,000 in annual wages, provided that they resided abroad for 12 straight years before they started working in Cyprus.
The intention of the Cyprus Government is for this program to become one of the most competitive in the European Union and has already shown enormous interest.
The Legal Opinions law firm has successfully assisted many legal entities and individuals to relocate with their families by providing a full range of services including immigration, corporate, tax consulting, financial and legal. Hence, if you or your Company are considering relocating to Cyprus, expert advice should be taken with respect to the said relocation.
Any information provided by A. GEORGIOU & CO LLC is for general purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.
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