Cyprus:
The Cyprus Parliament Voted To Extend The Application Of Article 8(21) Of The Cyprus Income Tax Law
23 December 2020
by
PwC Cyprus
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In brief
On 15 December 2020 amending law No.7, which amends Article
8(21) of the Cyprus Income Tax Law, was published in the Cyprus
Government Gazette.
In detail
On 15 December 2020 amending law No.7, which amends Article
8(21) of the Cyprus Income Tax Law, was published in the Cyprus
Government Gazette.
Article 8(21) grants a five-year exemption from income tax of
the lower of:
- 20% of the remuneration arising from employment in Cyprus,
or - EUR 8.550,
or persons that were not tax resident in Cyprus prior to the
year of commencement of their employment; the five-year exemption
begins in the year that follows the commencement of their
employment in Cyprus; before the amending law, the last year of
exemption was 2020.
The amending law extends the availability of the exemption up to
employment that commences in 2025.
The amending law has not extended the duration of the exemption
that an individual can enjoy, i.e. the duration of the exemption
for an individual remains five years, e.g. a person commencing
employment in Cyprus in 2025 will be eligible to claim the relevant
tax exemption for 2026-2030.
The takeaway
The said extension safeguards the attractiveness of Cyprus,
therefore Cyprus is expected to continue attracting overseas
employees to commence employment in Cyprus.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Exercises a business and/or is employed by a Cyprus Company
and/or holds an office in Cyprus with a tax resident Cyprus Company
for the same calendar year.