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On Tuesday, 10/05/2022, the Cabinet of Ministers approved a new bill with tax incentives aiming to promote headquartering and attract high-quality workforce to the island. The bill is in line with the Government’s Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus, which was approved by the Cabinet in October 2021.
The benefits apply equally to foreign and Cypriot professionals who are currently living and working abroad and wish to repatriate. Additional incentives are expected to be implemented in the near future. The discussed measures include the granting of visas and work permits to the spouses of foreign professionals relocating in Cyprus. Furthermore, a One-Stop-Shop will be operating to facilitate and fast track the relocation procedures.
The bill provides a 50% tax break to workers with annual remuneration of €55.000, applicable for a period of 17 years starting from the worker’s first year of employment in Cyprus, provided that they were abroad for at least 12 consecutive years prior to their employment. This benefit will also be applied retroactively to existing employees falling into this category. New employees will have a grace period of 2 years for obtaining this incentive, while existing employees will also benefit from a grace period of 6 months.
According to Minister of Finance, Mr. Constantinos Petrides, this program will bring both direct and indirect benefits to the local economy and businesses are encouraged to relocate their administration to the island and therefore creating “real infrastructure”. He continued to say that through this relocation the tax base is expanded and consequently the state’s tax coffers.
The scheme is currently being reviewed by the state legal service and a final legal approval is expected in the near future.
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*DISCLAIMER: This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.
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