In reference to the treatment of the various benefits in kind that an employee may enjoy, the Ministry Labour, Welfare and Social Insurance have clarified the taxable treatment of the following scenarios.
The Ministry of Finance has announced the following measures as part of the action plan to enhance Head Quartering in Cyprus, attract foreign investment and or enhance business activity in Cyprus.
Extension of the tax deduction period benefit for those employees that were not Cypriot residents in a prior period of 17 years before their commencement of their employment to Cyprus
50% tax deduction for those new residents/employees with a minimum annual salary of €55,000
The current beneficiaries with Salaries over €100Κ can extend their right from 10 to 17 years
The employees that have a Salary from €55Κ-€100Κ can benefit for a period of 17 years.
New policy for employment from 3rd countries
The companies that are:
operating in Cyprus and are of foreign interest/shareholding and maintain fully fledged offices
Cyprus Shipping companies
Cyprus Companies involved in innovation and technology
Cyprus pharmaceutical Companies or Companies that operate in the fields of biogenetics or biotechnology
Can recruit from 3rd countries if the following criteria are met:
Minimum monthly gross Salary €2500
The candidate must hold a university degree or equivalent, or has a minimum 2 years’ experience
Minimum 2 years contract
The Company can employee up to a max of 70% from 3rd countries (the limitation applies for a period of 5 years)
The work permits will be issued within one month period and will be valid for 3 years.
A work permit can also be granted to the spouse/husband of the eligible individual that obtains visa with this scheme.
Canrecruitsupportstafffrom 3rd countries withagrosssalarylower than€2500 as long as the following criteria are met:
The Company can employee up to a max of 70% from 3rd countries (the limitation applies for a period of 5 years)
The work permits will be issued within one month period and will be valid for 3 years.
DIGITAL NOMAD VISA (with a max number of 100)
Who can benefit?
Citizens of 3rd countries self-employed/freelancers or employees that are working remotely for employers/customers that are located outside Cyprus, for a 12-month period.
Residency status
Have the right to stay in the country for a year with option to renew for another 2 more years.
Their family has the right to stay in Cyprus but not the permit to work.
If they stay in Cyprus for more than 183 days and are not tax residents of any other country will be considered as tax residents of Cyprus.
Prerequisites:
The visa is provided if the following requirements are met:
A written declaration is filed that confirms that their services/work is not provided to a local Cyprus Company
There is a signed contract of employment and or engagement letter with an overseas Company or physical person or any other proof of work for the duration of the period that the visa is granted
The applicant can prove that he or she will have a minimum monthly income of EUR3.500. The amount is increased by 20% in case they have a wife/husband/partner and another 10% per child
They have a medical insurance and a clean criminal record
A 50% tax deduction on investments to innovative Companies both by a Cypriot Tax resident physical person or Company
A 120% capital allowance on expenses that relate to R&D
Citizenships
An employee that completes 5 years of residency and employment in Cyprus or 4 years and carry a certification of Greek language, can apply for a citizenship.
We would like to inform you of the below
important changes in relation to Social Security and National Health System
(GESY) contributions and the personal income Tax:
Social Security contributions
As from 1st January 2020 the
monthly maximum insurable gross salary in respect the Social Security
contributions will increase to €4.572
GESY-National Health System
As from 1st March 2020 the GESY-National
Health System will increase to:
Categories
March 2020
Employees
2,65%
Pensioners
2,65%
Other Income e.g. interest, dividends,
rental income
2,65%
Directors
2,65%
Self Employed
4,00%
Employers
2,90%
The maximum taxable amount per individual remains
at €180.000
Personal Income Tax
The House of Parliament, on the 6th of December 2019, approved an increase in the percentage of maximum allowable tax deductions in relation to life insurance, medical insurance, social security, pension fund, and provident fund contributions from 1/6 of gross income that was applicable up to 31 December 2018 to 1/5 of gross income.
The above is applicable from the 1st January 2019 (tax year 2019) onwards.
Cyprus Tax Authorities have announced the intention that minimum margin scheme for Group financing will be abolished on 1 July 2017. Current regime was regulated according to the correspondence between the commissioner of Tax Department and the Taxation Committee of ICPAC dated 4 July 2011. According to the current legislation, minimum accepted margins for intra-group financing range between 0.125% – 0.35%
The Cypriot Government has presented to the House of Representatives this week amendments to the income tax laws in order to bring the Cypriot legislation on the taxation of the income from the exploitation or sale of intangible assets, in line with the provisions of the OECD BEPS Action 5 and within the new EU rules on the subject.