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

The House of Representatives on Thursday, December 3, 2020, has passed a law, a bill submitted by the Ministry of Finance with the ultimate goal of maintaining the attractiveness of Cyprus as a country of attracting employees, by creating real infrastructure and investment.

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. The framework was originally legislated in 2008, extended in 2015 for five years and expires on 31/12/2020.

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