Tax scheme to attract high earners to Cyprus

The Tax Department said on Tuesday that an amending law providing for income tax exemptions for non-residents of Cyprus has come into effect, and that the relevant tax form would soon be made available for download.

The amending law has retroactive effect as of January 1, 2022, and affects personal income tax declarations for 2022.

According to the statement, the relevant form will soon be uploaded to the Taxisnet system. It said the public would be informed via press releases and/or emails about the start of the period for filing the income tax declaration.

The income tax exemptions in question relate to persons who were non residents of Cyprus for a period of 15 years prior to their first employment here, and whose annual income exceeds €50,000. Previously, the law concerned persons with an annual income of more than €100,000.

Eligible persons will be taxed on only 50 per cent of their declared income.

This is part of a government scheme to attract highly-paid professionals to Cyprus, and to encourage foreign companies – such as IT companies – to move their headquarters to the island.

The income tax exemption is applicable/available for a maximum period of 17 years. If during any year of employment in Cyprus a person’s income is less than €55,000, that person will not qualify for the tax exemption for that year.

The Tax Department also recalled that October 2, 2023 is the last date for filing income tax declarations for 2022, and for paying income tax for 2022. Those obligated to do so are employed persons, pensioners and self-employed persons whose total gross income for 2022 exceeded €19,500.