Cyprus Tax News: Primary Residence – VAT update

The House of Representatives recently voted on amendments in connection to the 50% exemption from income tax on the employment related remuneration subject to conditions.

The amendments have retroactive effect as from 1 January 2022 and are listed below:

  • The exemption from income tax will be granted if the individual was not a resident of Cyprus for 15 consecutive years (previously 10 years) prior to any employment in Cyprus.
  • Individuals who meet the conditions for the 50% exemption are allowed to continue to benefit from this exemption even if they change employer. Previously, the exemption was only granted for the first employments in Cyprus.
  • The exemption will be granted for a period of 17 years from the date of employment.

The above amendments apply to the transitional provisions that were initially introduced on 26 July 2022.