The Tax Department issued Circular 4/2024 on 8 July 2024, regarding the exemption from income tax of 50% of the remuneration from employment exercised in Cyprus, as per the amended Article 8(23A) of the Income Tax Law.
The Circular provides clarifications in relation to the exemption as per Article 8(23A) of the Income Tax Law, as amended on 26 July 2022 and as further amended on 30 June 2023 (the relevant alert issued by KPMG Cyprus on this topic can be accessed here).
You can access the Circular issued by the Tax Department here
KPMG in Cyprus observation
This is a very positive development, as the Circular issued by the Tax Department provides guidance to taxpayers and their employers, regarding the eligibility of individuals for the 50% exemption from income tax for first employment in Cyprus, as per the amended provisions of the legislation, which were introduced on 30 June 2023 with retrospective effect as from 1 January 2022.
It is important to note that an extensive number of practical examples are also included in the Circular issued, covering all the important aspects of this exemption.
On that basis, it is expected that for a number of cases where the interpretation of the legislation itself was not sufficient to determine whether the incentive under the Article 8(23A) could be granted, the Circular issued provides the necessary guidance and clarifications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.