Last June, the Parliament adopted a bill with further relaxations for third-country workers who are paid high wages.
The changes to the law remove the requirement for first employment in the Republic and increase to 15 years the beneficiary’s previous employment abroad to receive the tax deductions.
Even more generous from 1 January 2023 are the tax breaks provided by the state to thousands of highly paid workers from third countries to work in Cyprus.
These workers, often referred to as golden boys (due to their high salaries), come to the country through the high-level executive recruitment scheme, which was first implemented in 2012 as part of an urgent need to boost the Cypriot economy, which was then facing serious fiscal problems.
These highly paid employees, according to relevant data, are mainly employed in foreign-owned companies in the IT, shipping, service, and pharmaceutical sectors. Their influx to Cyprus has increased significantly over the last two years, with a continuous upward trend.
Through the tax exemption, amounting to 50%, from the income of highly paid executives, the beneficiaries, who are new taxpayers for the Tax Department, enhance in various ways (such as the imposition of other taxes and consumption) the state coffers and economic activity more broadly. At the same time, the Tax Department estimates that the tax relief they receive has no impact on the public economy.