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50% Income Tax Exemption for High-Earners in Cyprus


On May 10, 2022, the Council of Ministers approved a highly significant improvement of an incentive aiming at attracting foreign executives (both EU and non-EU residents) to Cyprus to expand their presence, assist in the expansion of the technology sector island wide, as well as repatriate Cypriot professionals who currently reside and have their business abroad.

On July 26, the Income Tax Law was amended with the introduction of articles 8 (21A) and 8 (23A). What is more, there have been additional amendments to the existing articles 8 (21) and 8 (23):

  • Article 8 (23A) reduces the threshold of taxable income by offering a 50% exemption for first employment and with a duration of 17 years to those with a remuneration of more than 55.000E per annum, starting January 2022 for individuals who did not reside in Cyprus for 10 consecutive tax years prior to this.
  • Article 8 (21A) of the Income Tax Law offers differentiated benefits to those not eligible for the aforementioned exemption. The benefits include a 20% exemption of the gross emoluments or 8.550E (whichever is lower) from first employment salaries in Cyprus. The particular exemption is available for a maximum of 7 years, starting July 2022. It is noted that these individuals should not have been Cyprus residents for 3 consecutive tax years before their employment commenced or that they were employed outside Cyprus by a non-resident employer. The 20% exemption cannot be accumulated with the 50% exemption. Further clarifications are due relating to whether the individual should become a Cyprus tax resident or the employer to be a tax resident as well to be granted the exemption.
  • Should individuals have begun their employment in Cyprus between 2016 and 2021, with annual remuneration of over 55.000E or with less than 55.000 p.a yet whose revenue exceeded the amount 6 months after the official publication of these amendments, and have already received exemptions under the articles 8 (21) or 8 (23) may also claim the 50% exemption, under certain conditions, leading to an extension of the duration to up to 17 years in total.


A termination of the following exemptions applies for those being employed after July 26th, 2022:

  • Previous 20% exemption which applied to individuals who commenced their employment between 2012 and 2025, with a duration of 5 years and being effective the tax year following the year of employment. Nevertheless, should an individual be eligible for it before July 26 2022, will continue to benefit for 5 years.
  • Previous 50% exemption applied for 10 years should the individual’s remuneration exceed 100.000 per annum. The exemption shall not be granted to individuals who have been tax residents of Cyprus for 3 years before the commencement of their employment or who were employed by someone who was a tax resident of Cyprus the year prior to their employment. Should an individual be eligible for it before July 26 2022, they will continue to benefit for the 10 year period, unless qualifying for the new exemption which would signify them benefitting for a total of 17 years.


As always, our department of Taxation experts is at your disposal should you require further assistance.

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