Cyprus, July 2023 – The Tax Department recently amended the law for income tax exemptions (a 50% exemption) for non-residents of Cyprus.
The revised law has backdated effect as of 1st of January 2022 and affects personal income tax declarations for 2022.
The changes concern individuals who were non-residents of Cyprus for a period of 15 years previous to their first employment in the Island, and with an annual income which exceeds €50,000. Before the changes, the law only applied to persons with an annual income of more than €100,000.
A few details and important changes
- The non-tax residency condition has been extended from 10 consecutive years to at least 15 consecutive years immediately before the commencement of the individual’s first employment in Cyprus.
- The recent changes clearly state that exemptions apply to remuneration FROM employment in Cyprus, where before it was limited only to the remuneration from FIRST employment in Cyprus. This amendment greatly expands the total number of beneficiaries of the provision and allows individuals to qualify for the exemption even if they change their employer within the period of 17 years.
- The exemption applies for a period of 17 tax years or until the provisions of the Article are ended, whichever is the earlier, starting from the tax year of the start of first employment of the individual in Cyprus.
- Individuals who were previously eligible for the 50% exemption of their remuneration from their first employment will continue to benefit from the exemption provided that all the conditions, as they were in effect before the date of the publication of the Amending Law, are met.
Have in mind that employed persons, pensioners and self-employed persons whose total gross income for 2022 exceeded €19,500 must file income tax declarations.
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