Extension of the income tax exemption of 20% or €8,550 for qualifying Cyprus tax resident
Introduction:
Article 8(21) of the Income Tax Legislation sets out that the lower of €8.550 and 20% of the remuneration from any employment exercised in Cyprus by an individual who was resident outside Cyprus the tax year before the year of commencement of employment in Cyprus is exempt from income tax. In addition, the framework was applicable for qualifying individuals commencing employment in Cyprus from 2012 until 2020 with a maximum period of five year. The exemption can be claimed starting from 1 January following the year of commencing employment.
Tax Update:
On 15 December 2020, the tax framework was amended by extending the five year exemption period for qualifying individuals commencing employment between 2012 and 2025. It should be noted that the exemption is applicable for a maximum of five years which should commence on the next year of employment.
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