Cyprus government approves new tax scheme for foreign workers and companies
The Cabinet of Ministers of Cyprus on Tuesday 11 of May approved a new tax incentives scheme aimed at attracting foreign companies and high-quality workers to Cyprus to relocate their headquarters in Cyprus.
In statements made after the Cabinet meeting, Finance Minister Constantinos Petrides said additional measures are expected to be implemented in order to further incentivise foreign workers into relocating to Cyprus to be implemented by the Ministry of Interior.
“We are convinced that this scheme is one of the most competitive of its kind in the European Union,” Petrides said.
“There is already a lot of interest, and it particularly concerns high-tech companies, which in recent years seem to choose the island as a place to relocate their headquarters,” the minister added.
Petrides also explained that the government is confident that the scheme will further promote the development of the technology sector in Cyprus, as both a medium and long-term strategic objective. The main advantages are the following:
a.50 per cent tax break for workers receiving upwards of €55,000 in annual wages.
- The time period for which the tax break would be applicable will be extended to 17 years, up from its current period of 10 years.
- Spouses of employees of third countries, to be able to work in Cyprus.
The time period for the tax break kicks in the worker’s first year of employment in Cyprus.
Moreover, the above terms will also be applied retroactively to current eligible workers making more than €55,000 in annual wages, provided that they resided abroad for 12 straight years before they started working in Cyprus. A grace period of two years will be given to new employees, as well as a period of six months to existing workers, in order for them to gain the necessary prerequisite criteria for the scheme.
This concerns cases where an employee’s initial remuneration started at an amount below the minimum annual salary of €55,000.
“Through this relocation, the tax base is expanded and consequently the state’s tax revenues,” the minister concluded.