Amendment of the Income Tax Law, as follows:
Α. To expand the existing tax relief period of the deduction from the taxable income of a physical person by 50% (fifty percent) of their first annual emoluments in the Republic of Cyprus, in the case that the person was not a Cyprus tax resident before his/her employment, with the purpose of extending the number of persons eligible for this relief.
Specifically for the new taxpayers, for each year that their annual emoluments shall exceed the amount of €55.000, they will be able to deduct 50% of their emoluments for a period of 17 years, if they were not tax residents in Cyprus for a period of at least 10 consecutive years before their employment.
For existing taxpayers that were not tax residents in Cyprus for a period of at least 10 consecutive years before their employment, from the year 2022 onwards, they will be able to claim a deduction of 50% of their annual emoluments, again for a period of 17 years beginning from the year they were employed in Cyprus, if the following rules apply:
- They are anyway eligible for the 50% deduction as per Article 8(23)
- Their first employment in Cyprus occurred between 2016 and 2021 and their annual emoluments exceeded the amount of €55.000
- Their first employment in Cyprus occurred between 2016 and 2021 and their annual emoluments did not exceed the amount of €55.000, but for a period of 6 months starting on 26/07/2022 their annual emoluments will exceed the amount of €55.000
Β. For a period of 7 (seven) years physical persons can claim a tax relief equal to 20% (twenty percent) of their taxable emoluments from their first ever employment in Cyprus, or a fixed amount of relief equal to €8.550, whichever is the smallest, provided that the person was working for 3 (three) consecutive years before the beginning of his/her employment, outside of Cyprus and for a non Cyprus tax resident employer.
For existing taxpayers that were eligible to this 20% deduction as per the provisions of Article 8(21) they remain eligible to this deduction for a period of 5(five) years.
