On the 10th of May 2022, the Council of Ministers has approved a new tax incentives scheme aimed at attracting foreign companies and high-quality workers to Cyprus as part of the Strategy for Attracting Companies to operate and/or expand their activities in Cyprus that was approved by the Cyprus government and commenced in the first quarter of 2022.
The approved incentives also refer to the repatriation of Cypriot professionals who are currently living and working abroad, by offering the same benefits as offered to foreign professionals.
Under the previous scheme, non-Cyprus residents working in Cyprus and earning in excess of EUR 100,000 per annum could benefit from a tax exemption of 50% on their employment income for the first 10 years of their employment. The new scheme expands on this:
- The minimum wage requirement is reduced from EUR 100,000 to EUR 55,000 per year, and the 50% tax exemption period will be extended to 17 years from the commencement of employment;
- A new employee whose initial wage starts below the minimum annual salary of EUR 55,000 will be entitled to a grace period of up to two years to meet the qualifying criteria of the scheme. Existing employees with a salary below EUR 55,000, will have a grace period of six months;
- Current employees, earning more than EUR 55,000, who resided abroad for 12 consecutive years before moving to and commencing their employment in Cyprus, can also benefit from the improved incentives of the new scheme, which will be applied retrospectively.
The program also concerns an additional bill of the Ministry of Interior which has already been prepared and submitted with the Law Office of the Cyprus Republic in relation to residency of foreign individuals in Cyprus where it concerns the right of establishment in Cyprus of the spouses of professionals who will choose to settle on our island but also access to the labor market and the creation of a one stop shop facilitating the matters regarding residency in Cyprus.
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