Cyprus is considered to be one of the best places to open a new company or transfer tax residence of an international business. The corporate tax rate in the country is only 12.5%. The company does not pay tax if it receives income from dividends, exchange rate differences, securities transactions, a foreign branch of a Cypriot company.
Only half of the income tax is paid by managers and employees of foreign companies in Cyprus if their annual salary is above €100,000.
The Cabinet of Ministers of Cyprus has approved a bill that expands the list of those who can qualify for tax incentives. Now, employees with an annual salary of more than €55,000 will be able to use the right to pay half the tax.
The tax credit will apply to both new employees and those already working in international business.
The duration of tax benefits will be increased by 7 years. Now new foreign employees have the right to use the benefits for 10 years.
Employees of foreign companies who already live and work in the country will be able to use the benefits only in one case - if they have lived abroad for at least 12 years before starting work in Cyprus.
If an employee of a company receives less than €55,000 per year, he can agree on a salary increase within two years from the start of the law. Then he will also have access to income tax benefits.
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