Lawmakers have attacked the government’s expanded “Minds in Cyprus” tax incentive scheme as creating a two-tier employment system, as the Finance Ministry reported that 600 overseas workers have applied to take advantage of the breaks.
MPs on the House Finance Committee warned today that the programme creates unequal treatment amongst employees by offering tax exemptions to newcomers that existing workers cannot access. They demanded the scheme include an expiry date.
The Finance Ministry defended the initiative, telling the committee that 600 people working abroad have expressed interest in moving to Cyprus under the incentives. The scheme aims to attract mainly young workers, a ministry representative said, noting Greece operates a similar programme.
Under the bill being debated, workers who have lived abroad for seven years would receive a 25% tax exemption on employment income or self-employed profits, up to €25,000 annually, for seven years. The current scheme offers just 20% up to €8,550.
The bill introduces a new distinction: applicants with recognised degrees need only have stayed overseas for three years, whilst those without degrees must have been abroad for seven years before qualifying.
The scheme carries retroactive effect from 1 January 2025, meaning workers who arrived in Cyprus last year will benefit, Maria Gregoriou of the Pancyprian Bar Association told the committee.
Gregoriou questioned whether the schemes serve their intended purpose, particularly after recent tax reforms that already provide workers with new deductions. To genuinely bring talent that benefits Cyprus, the bill should require that applicants’ experience aligns with the work they’ll actually do here, she said.
The ministry reported the state earned €120 million in revenue from these schemes in 2024, though committee members requested detailed breakdowns of applicant profiles—whether Cypriot or foreign, their ages and professions.
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