TAXATION OF INDIVIDUALS
On 10th of December 2015, the House of Representatives voted a number of significant tax law amendments that were published in the Government Gazette on 17 December 2015.
Extension on the exemption from first employment in Cyprus
Foreign individuals not being Cyprus tax residents before their employment by a Cyprus Company are entitled to tax exemptions as per the two plans below:
- 20% of their employment income or Eur 8.550 (lower of) is tax exempted from their employment income for a period of 3 years. This period is now extended to 5 years and can be claimed only until the year 2020.
- 50% of their employment income is tax exempted for a period of 5 years provided that the individuals earn more than Eur 100.000 per year. This period is extended to 10 years.
For employment which start after 1st of January 2015, the benefit of 50% deduction is given only if the individual was not tax resident of Cyprus for any of the three out of the five last tax years prior to the commencement of the employment in Cyprus and at the same time he was not Cyprus tax resident the previous tax year.
The foreign individuals becoming after their employment Cyprus tax residents can claim only one of the two plans.
The change applies from the tax year 2015.