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    Cyprus – Tax Authority Issues Guidance on Special Expatriate Tax Regime

    GMS Flash Alert 2024-158 | July 29, 2024

    The Cyprus Tax Department issued Circular 4/2024 on 8 July 2024, regarding the exemption from income tax of 50 percent of the remuneration from employment exercised in Cyprus – specifically the rules covering the exemption from income tax for first employment – as per the amended Article 8(23A) of the Income Tax Law.1

    The Circular provides clarifications in relation to the exemption in those cases where compensation exceeds EUR 55,000 per annum.

    The Circular issued by the Tax Department (in Greek) can be accessed here. 

    Why this matters

    Given the level of detail provided in the Circular’s many examples of circumstances where the special tax regime could or could not be applied/claimed, it is expected that, for a number of cases involving overseas expatriates and inpatriates where the interpretation of the legislation itself was not sufficient to determine whether the incentive under the Article 8(23A) could be granted, taxpayers and their tax service providers will now have more clarity and guidance regarding whether they are within the scope of the regime.

    KPMG Insights

    As mentioned above, an extensive number of practical examples are included in the Circular issued, covering all the important aspects of this exemption.

    Contacts

    George Markides
    George Markides

    Board Member, Head of Tax Services

    KPMG in Cyprus

    Costas Markides
    Costas Markides

    Board Member, GMS Country Leader

    KPMG in Cyprus

    katia-papanicolaou
    Katia Papanicolaou

    Board Member

    KPMG in Cyprus

    Additional Resources

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    Footnote

    1  Article 8(23A) of the Income Tax Law, as amended on 26 July 2022 and as further amended on 30 June 2023 (for coverage of the 2023 amendment, see GMS Flash Alert 2023-150, 24 July 2023).

    Related Resource

    This article is excerpted, with permission, from "Circular 4/2024 - Article 8(23A) exemption for employment excercised in Cyprus" in Tax Alert (19 July 2024), a publication of the KPMG International member firm in Cyprus.

    Disclaimer

    The information contained in this newsletter was submitted by the KPMG International member firm in Cyprus.

    GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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