The Cyprus Income Tax Law offers significant exemptions on the taxation of employees relocated to Cyprus. The following are the related reliefs that are available for both high and lower-salaried employees:
Gross emoluments above Euro 100,000 – (50% relief)
Cyprus Income Tax Law offers employees relocated to Cyprus, with annual gross emoluments exceeding Euro 100,000 a 50% exemption on personal income tax for ten (10) years, subject to meeting the following conditions:
- Were not Cyprus Tax Resident during the year before the commencement of employment;
- Were not Cyprus Tax Resident in any three (3) years out of the last five (5) years before their employment in Cyprus.
Employees will not be allowed the relief in a specific year if their emoluments fall below Euro 100,000 but will still enjoy the 20% relief described in the following section.
The term gross emoluments include, but is not limited to, the following: annual gross salary as a result of the individual’s employment in Cyprus, bonuses, benefits in kind, or any other type of income directly related to their employment in Cyprus.
Gross emoluments below Euro 100,000 – (20% relief)
Cyprus Income Tax Law offers employees relocated to Cyprus, with annual gross emoluments below Euro 100,000, a 20% or Euro 8,550 deduction on personal income tax (whichever is the lowest). The exemption applies for five years starting from 1 January following the employment commencement and applies for tax years up to 2025.
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Along with the above, other significant tax relaxations are available for your employees, the employer, and the business owner. Therefore, If considering relocating to Cyprus, it is essential to obtain proper advice.
What we can do for you:
- Guide you on the timing of relocation to obtain maximum tax benefits
- Advise you and assist on the set up your corporate structure in the most tax-efficient way
- Help with all the related immigration needs
- Register all physical and legal persons to the necessary authorities and obtain required certificates
- Assist with the bookkeeping and reporting so that you can focus on growing your business
- Ensure that tax compliance in all aspects of the tax spectrum