MPs attacked a new tax scheme that gives a waiter who worked abroad the same generous breaks as a university graduate—and lets both stack these exemptions on top of deductions from the recent tax reform.
The House Finance Committee warned the “Minds in Cyprus” scheme creates a two-tier workforce, with newcomers from abroad enjoying far better treatment than people already working in Cyprus.
Workers relocating under the scheme get tax exemptions of up to 25% of their salary, capped at €25,000. They can also claim all the standard deductions available to other taxpayers—for family size, children, rent, mortgage interest and higher tax-free thresholds.
MPs discovered the scheme doesn’t just target “talents” as originally intended. Anyone who worked abroad for seven years and spent one year in Cyprus at some point qualifies—regardless of education level.
A waiter who spent years working in an English restaurant could claim the tax breaks, provided they were once a tax resident in Cyprus, even if they had no income at the time.
DISY MP Savia Orfanidou called it a “two-tier workers” system.
AKEL MP Andreas Kafkalias said the government pushed through tax incentives without assessing the existing framework, social impact or tax reform first.
DIPA MP Alekos Tryfonidis demanded the government provide proper incentives for workers already in Cyprus.
MPs also raised concerns that workers who arrived under two earlier similar schemes will get fewer benefits than those using Minds in Cyprus from now on.
A Finance Ministry representative defended the scheme, saying the current programme gives workers who spent three consecutive years abroad a 20% income tax exemption, capped at €8,550. That exemption runs for seven years and ends in 2027.
Under the new scheme, the tax break rises to 25%, with a €25,000 cap. Workers with a recognised degree must have worked abroad for three years to qualify. Those without a degree need seven years abroad.
A separate 50% tax exemption exists for people who spent 15 years outside Cyprus and earn more than €55,000 annually.
The Minds in Cyprus platform has received 600 applications. Finance Committee Chair Christiana Erotokritou asked the ministry to profile the applicants.
Nadia Symeonidou from the ministry said the state collected €120 million in revenues from the scheme in 2024. Between 2021 and 2024, workers who came to Cyprus through such schemes claimed €2 billion in tax exemptions.
Maria Gregoriou from the Cyprus Bar Association said the scheme is retroactive from 1 January 2025, meaning workers who arrived last year will also benefit. The tax reform has changed the landscape considerably, she said, as workers now benefit from deductions in the new legal framework.
A representative of the Institute of Certified Public Accountants (SELK) called the scheme an additional tax incentive. “With any incentive like this, there’s always a question of fairness. Some people benefit, some don’t. You can’t set criteria that satisfy everyone,” he said.
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