22 Dec Tax Alert – Cyprus tax legislation amendment for extending the application of Article 8(21) of the Cyprus Income Tax Law
On 15 December 2020 amending law No.7, which amends Article 8(21) of the Cyprus Income Tax Law, was published in the Cyprus Government Gazette.
Article 8(21) grants a five-year exemption from income tax of the lower of:
- 20% of the remuneration arising from employment in Cyprus, or
- EUR 8.550.
The five-year tax exemption applies to individuals that were not tax resident in Cyprus prior to the year of commencement of their employment and begins in the year that follows the commencement of their employment in Cyprus.
Before the amending law, the last year of tax exemption was 2020.
The amending law extends the availability of the exemption up to employment that commences in 2025 and does not extended the duration of the exemption that an individual can enjoy, i.e. the duration of the exemption for an individual remains five years, e.g. a person commencing employment in Cyprus in 2025 will be eligible to claim the relevant tax exemption for 2026-2030.
The purpose of the above is to attract workforce and investment in Cyprus.