On 22 June 2023 the House of Representatives passed some further amendments to the Income Tax Law (“ITL”) in relation to article 8(23A). The key amendment is the fact that eligible individuals will be able to now change employers and not lose the benefit.
Article 8(23A) provides a 50% exemption from income tax on the employment related remuneration of eligible individuals (subject to conditions).
The amendments that were made to article 8(23A) are applicable retrospectively from 1 January 2022 and are the following:
- The exemption from income tax will be granted if the individual was not a resident of Cyprus for 15 consecutive years (previously 10 years) prior to any employment in the Republic.
- The exemption will be granted for a period of 17 years from the date of employment (or until the termination of the provisions of article 8(23A)), irrespective of whether the individual changed his/her employer during the 17 years. Previously, the exemption was only granted for the first employment of the individual in Cyprus.
It should be noted that the above amendments also apply to the transitional provisions that were initially introduced in article 8(23A) when the legislation was published in the Official Gazette of the Republic on 26 July 2022.
The individuals that were eligible for the 50% exemption from income tax on their remuneration from employment based on the old provisions of article 8(23A) that were applicable before the amendments outlined above, will continue to claim the 50% exemption, provided that they meet all the conditions of article 8(23A) that were applicable before the entry into force of the relevant amendments.
Feel free to contact us for more information and clarifications.
