Nicosia: The plenary of the House of Representatives approved the 'brain gain' bill aimed at offering tax incentives to attract Cypriot and foreign scientists to Cyprus.
According to Cyprus News Agency, the bill amends the Income Tax Law to grant tax incentives and other facilities aimed at the movement of skilled workers to the Republic and the repatriation of Cypriot citizens. The bill is part of the Action Plan for the Repatriation of Talent and is expected to make the existing tax framework more attractive, flexible, and accessible.
Based on the current legislation, an individual who, for three consecutive years prior to the commencement of their employment in the Republic, was employed outside the Republic by a non-resident employer and whose employment in the Republic commenced after 26 July 2022, is exempt from income tax. This exemption is effective until 2027 for 20% of the remuneration from first employment in the Republic or an amount of pound 8,550, whichever is lesser.
The exemption is granted for seven tax years, starting from the year following the year of employment in the Republic. The proposed regulations include an increase in the percentage of remuneration from first employment in the Republic that is exempt from income tax from 20% to 25%, an increase in the maximum amount of tax exemption from pound 8,550 to pound 25,000, and a reduction in the required period of time outside the Republic for an individual to benefit from the exemption from fifteen to seven years after completing their studies.