Interpretative Circular in connection to the new incentives for first employment in Cyprus
On 1st November 2022, the Cyprus Tax Department issued the interpretative Circular 10/2022 (“Circular”) in connection to the recently introduced incentives for first employment in Cyprus under articles 8(21A) and 8(23A) of the income tax legislation. For further details about the new incentives introduced, you can access our alert issued earlier this year.
The Circular issued by the Cyprus Tax Department covers the following matters:
- General clarifications regarding the applicability of the incentives introduced, under articles 8(21A) and 8(23A);
- Specific clarifications, interpretation of various terms and guidance with regards to the applicability of each incentive introduced, under articles 8(21A) and 8(23A);
- Guidance through practical examples in reference to the incentives introduced under articles 8(21A) and 8(23A) and their applicability to various scenarios.
KPMG in Cyprus observation
This is a very positive development, as the Circular issued by the Tax Department provides guidance to taxpayers and their employers, with regards to the eligibility of individuals to the newly introduced incentives for first employment in Cyprus.
It is important to note that an extensive number of practical examples are also included in the Circular. On that basis, it is expected that for a number of cases, whereby through only the interpretation of the legislation itself was not sufficient whether the incentives under 8(21A) and 8(23A) could be granted, the Circular issued provides the necessary guidance and clarifications.
You can access the Circular issued from the Cyprus Tax Department‘s website here.
How can KPMG assist?
Our dedicated tax team can assist you understand and assess how the provisions under articles 8(21A) and 8(23A), may affect yourself and/or your employees, taking into consideration the interpretive Circular issued by the Tax Department.
Should you wish to further discuss the content and potential impact of the Circular, please contact us.
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