Amendments to the conditions of eligibility of the 50% exemption from income tax from employment in the Republic of Cyprus -30th June 2023

On June 30th, 2023, an amendment to the Cyprus Income Tax Law (Ν. 118(I)/2002) (the ‘’Law’’)was published in the Official Gazette of the Republic referring to the 50% tax exemption of employment remuneration. The amendment has a retrospective effect as being in effect from January 1st, 2022.

The amendments are summarised as follows:

  • The revised definition of 'first employment in the Republic' now encompasses individuals who have initiated their first employment within the Republic, either with a resident or non-resident employer, but only after a continuous period of 15 years during which they did not engage in any employment within the Republic.
  • Under the previous provision of the Law, an individual had to refrain from being a resident in the Republic for 10 consecutive years before starting their first employment within the Republic. However, due to the recent Law amendment, this period has now been prolonged to 15 consecutive years.
  • An individual is considered to have “Commenced’’ the first year of employment in Cyprus when the individual for the first time, after the aforementioned period of 15 consecutive tax years not performing any remunerated services in Cyprus, has been employed in the Republic.
  • The Law now refers to remuneration from employment in Cyprus and allow individuals to qualify for the aforesaid exemption even if they change employer for within the period of 17 years. Prior to this amendment, the provision was limited only to the remuneration from first employment in Cyprus.
  • Particularly, the exemption now applies for a period of 17 tax years or until the provisions of this Article are abolished, depending on which is earlier, starting from the tax year of commencement of the first employment of the individual in Cyprus.
  • The exemption is granted in the tax year of commencement of first employment, provided that the remuneration from employment in Cyprus during the year of first employment is more than €55.000.
  • The exemption is granted in any year in which the remuneration from employment in Cyprus exceeds €55.000, even if in any tax year the remuneration has fallen below €55.000, as long as in the first or second year of employment in Cyprus the remuneration exceeded €55.000 and the Commissioner of Tax Department is satisfied that the fluctuation in the annual remuneration is not an arrangement put in place with the purpose of obtaining the exemption.

It is worthy to mention that individuals whose first year of employment in Cyprus was before year 2022, are also eligible to claim the said 50% exemption, provided that they meet certain conditions.

Our firm will be able to assist and provide with further information and clarifications for the above recent developments. Feel free to contact our firm A. & E. C. Emilianides, C. Katsaros & Associates LLC via email at or via telephone at 22676752.





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