The taxation system in Cyprus is one of the more beneficial in comparison to other countries, making it an attractive destination to both companies and individuals.
As an expat living in Cyprus, you can benefit from the following exemptions:
20% or MAX of €8,550 exemption
The Tax Relief entitlement was due to expire on 31/12/2020, however according to our sources, the government is now in discussions regarding the extension of this 20% tax benefit for expats for five more years since they have seen an influx in people from abroad coming to Cyprus for employment as a result of this program. By the end of 2020, we should have an official announcement from the government on whether or not this will continue.
For someone who was not residing in Cyprus prior to taking up employment in Cyprus is exempted from tax and this would apply from January 1s from the year following the year of the beginning of employment. The lower of 20% on the annual emoluments or EUR 8,550 (whichever is lower) is the amount that is exempt for the aforementioned individuals.
This exemption can only be benefited from for a maximum of 5 years until the year 2020. It is now under review to be extended and we should have an announcement soon.
When an individual’s income exceeds EUR100,000 per annum starting from the actual start date of employment and 12 months onwards and was not a tax resident in Cyprus prior to the commencement of their employment, 50% of the gross emoluments are eligible to be deducted from taxable income.
This exemption can only be benefited from for a period of 10 years from the year of employment.
It is important to emphasize that no individual is entitled to both exemptions simultaneously.
When submitting your tax returns, it is important to be able to distinguish whether or not you are considered a resident of Cyprus or not as it makes a significant difference in terms of your claims.
At Fairfax Yeaman, our team of experts can access whether the benefit is applicable in your case. To simplify the procedure, contact the Fairfax Yeaman team to assist your personnel by contacting them on +357 25558025 or at accounts@fairfaxyeaman