Announcement of the Ministry of Finance for the extension of the tax exemption of 20% for new tax residents employed in the Republic

17 Dec Announcement of the Ministry of Finance for the extension of the tax exemption of 20% for new tax residents employed in the Republic

On 15 December 2020, an amending law was published in the Gazette with respect to Article 8(21) of the Income Tax Legislation. The purpose of the amendment is to maintain the attractiveness of Cyprus as a country of attracting employees from abroad.

With the passed Law, the Income Tax Law was amended, so as to extend for another five years (until 2025) the existing tax exemption framework for employees who were not tax residents of Cyprus in the year before the start of their employment. In addition, a provision has been added to ensure that this provision is applied for five years from the start of employment.

According to the framework, there is an exemption of 20% from income tax, from employment which is exercised by a person who was resident outside the Republic before the start of employment or an exemption is given for the amount of € 8,550, whichever is less.