After months of delay, the House of Representatives has approved tax incentives and related measures under the Minds in Cyprus initiative, aiming to attract skilled professionals to the Republic and encourage the repatriation of Cypriot citizens.
With no major issues pending, the government’s repatriation drive now moves forward in full force following yesterday’s plenary vote.
Legislative approval clears the way
The incentives were first presented around a year ago, with the relevant bill revised several times before securing final approval. As a result, new Minds in Cyprus events scheduled for this year will proceed with the full repatriation framework in place.
Events were planned in Greece, the United States and the United Kingdom during 2025, targeting Cypriot professionals and skilled workers abroad.
What the bill changes
The approved legislation amends the Income Tax Law to grant enhanced tax incentives and other facilities aimed at attracting skilled workers to the Republic and supporting the repatriation of Cypriots.
The bill forms part of the Action Plan for Talent Repatriation and seeks to make the existing tax framework more attractive, flexible and accessible, as discussed in the House Finance Committee.
Under current legislation, individuals who worked outside the Republic for three consecutive years immediately before starting employment in Cyprus qualify for a tax exemption of 20% of their remuneration from first employment in the Republic, or €8,550, whichever is lower. This applies to employment that began after 26 July 2022 and remains valid until 2027.
The exemption applies for seven tax years, starting from the year following the year of employment in the Republic.
Increased exemptions and revised criteria
The new provisions increase the exemption from 20% to 25% of remuneration and raise the maximum tax-free amount from €8,550 to €25,000.
They also reduce the required period of absence from the Republic from 15 to 7 years after completion of studies, while adjusting the employment criterion abroad to 36 months within the last five years, instead of three consecutive years.
The measure will undergo evaluation every five years based on socio-economic developments to ensure effectiveness.
During discussions, officials clarified that third-country nationals cannot be excluded from the provisions, as this would conflict with the Republic’s obligations under double taxation avoidance agreements.
Strong interest in the scheme
Since the government announced the initiative, 600 applications have been submitted through the “Minds in Cyprus” online platform, which serves as the central information hub for the scheme.
Following parliamentary recommendations, the Ministry of Finance submitted two revised versions of the bill. These broaden the scope of beneficiaries to include not only employees but also self-employed individuals.
The exemption will apply to income from salaried services or profits from business activity in the Republic, provided annual earnings reach at least €30,000.
The revised framework also introduces a requirement that beneficiaries must not have resided in the Republic during the seven-year period of absence abroad.
In addition, individuals may join the new tax framework if they worked abroad full-time for at least 84 months before starting employment in the Republic, without the need for a university degree. Alternatively, they may qualify with 36 months of full-time work abroad if they hold a university degree recognised by KYSATS.
The new provisions will take effect on 1 January 2025 for practical implementation purposes.
Lawmakers removed a clause that would have terminated the existing tax framework upon the new scheme’s introduction. As a result, the current regime remains in force until its expiry in 2027.
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