Cyprus tax exemptions for new arrivals: 20%, 50%, 25%

Money and taxes in Cyprus Checked: 27 October 2026 Changed: 6 March 2026

In short

Who it applies to: People who started employment in Cyprus after moving here: not resident for 15 years and earning over €55,000 a year — the 50% exemption; employed abroad by a foreign employer for three years before the move — 20%; once a Cyprus resident and back after seven years abroad — 25%, including the self-employed.
What it costs: It costs nothing: part of the salary is simply not taxed. 50% has no cap on the amount; 20% is at most €8,550 a year; 25% is at most €25,000 a year. Social insurance and GESY contributions are not reduced.
How long it takes: There is nothing to wait for: there is no approval, the exemption applies at once. 50% runs for 17 years from the year you started work in Cyprus; 20% for 7 years from the following year; 25% for 7 years from the year you started.
Where to apply: Through your employer: you fill in form Τ.Φ.59, and payroll withholds tax with the exemption already applied. There is no separate application to the Tax Department (Τμήμα Φορολογίας), but keep the documents on your past work and life abroad — they are asked for in an audit. The exempt part is also shown in the annual return.
If your case differs: Only one of the exemptions applies in any year, but you can choose again each year: if your salary falls below €55,000 in a year and 50% is not due, you can take 20% if you meet its conditions and its seven years have not run out. If you want certainty before moving, the department issues a written ruling on request at [email protected].

Your case

If you have not lived in Cyprus for the last 15 years and your salary is over €55,000 a year

Half of your salary is exempt from tax, with no cap, for up to 17 years counting the year you start. Pay must exceed €55,000 in the first or second year; after that the exemption applies in each year it is over €55,000, and a year below is simply skipped — the period is not extended. Any employment counts if you physically work in Cyprus, including remote work for a foreign company.

If you worked abroad for a foreign employer for the three years before moving

20% of the salary, but no more than €8,550 a year, for 7 years from the following year. There is no minimum salary. It applies only to your first job in Cyprus: changing employer ends it. The first job must start by 2027. If your salary is over €55,000 and you were not resident for 15 years, 50% is worth more.

If you were once a Cyprus resident and are back after seven years abroad

25% of income, at most €25,000 a year, for 7 years from the year you return — once in a lifetime. Work or business in Cyprus started in 2025–2030, income over €30,000 a year. One more condition: in the 84 months before returning — 36 months of full-time work for a foreign employer with a degree recognised in Cyprus, or all 84 without one.

If you are self-employed

The 20% and 50% exemptions are for employment only — they do not apply to business profits. The self-employed can only use 25% — and only as returning former residents on the terms above.

Deadlines and conditions

50% of the salary is exemptIncome Tax Law 118(Ι)/2002, art. 8(23Α): «το πενήντα τοις εκατόν (50%) της αμοιβής από εργοδότηση στη Δημοκρατία».
50% — for each year your pay is over €55,000Art. 8(23Α), proviso (ii): the exemption for a year in which pay «υπερβαίνει τις πενήντα πέντε χιλιάδες ευρώ (€55.000)», provided it exceeded €55,000 in the first or second year; proviso (iii): in the first year the first 12 months count. Circular 4/2024, paras 19–22.
50% — for up to 17 years from the year you startArt. 8(23Α), proviso (i): «για χρονική περίοδο δεκαεπτά (17) φορολογικών ετών … αρχής γενομένης από το φορολογικό έτος έναρξης της πρώτης εργοδότησης». Circular 4/2024, paras 26–27: years without the exemption do not extend the period.
50% — if you were not a Cyprus resident for the 15 years beforeArt. 8(23Α): a person who «δεν ήταν κάτοικος της Δημοκρατίας για χρονική περίοδο τουλάχιστον δεκαπέντε (15) συνεχόμενων ετών» before first employment in Cyprus. Circular 4/2024, para 13: the start year is not counted in the 15.
20% of pay from your first job in CyprusArt. 8(21Α): «το είκοσι τοις εκατόν (20%) της αμοιβής από πρώτη εργοδότηση στη Δημοκρατία ή … (€8.550), οποιοδήποτε είναι το μικρότερο».
20% — at most €8,550 a yearArt. 8(21Α): «ποσό ύψους οκτώ χιλιάδων πεντακοσίων πενήντα ευρώ (€8.550), οποιοδήποτε είναι το μικρότερο». There is no minimum salary (department FAQ on art. 8(21Α), note 2).
20% — if you worked abroad for a foreign employer for the 3 years beforeArt. 8(21Α): a person who «για τρία (3) συνεχή έτη, αμέσως πριν από την έναρξη της εργοδότησής του στη Δημοκρατία, εργοδοτείτο εκτός της Δημοκρατίας σε εργοδότη μη κάτοικο».
20% — for 7 years from the year after you startArt. 8(21Α), proviso: «για χρονική περίοδο επτά (7) φορολογικών ετών, αρχής γενομένης από το φορολογικό έτος που έπεται το έτος εργοδότησης».

Show all conditions (14)

20% — if your first job in Cyprus starts by 2027Art. 8(21Α): first employment in Cyprus started after Ν.121(Ι)/2022 was published (26.07.2022) «μέχρι και το έτος 2027».
25% of pay or profit — for those returningArt. 8(21Β) (Ν.17(Ι)/2026): «το εικοσιπέντε τοις εκατό (25%) της αμοιβής από οποιαδήποτε εργοδότηση στη Δημοκρατία ή των κερδών ατόμου από άσκηση οποιασδήποτε επιχείρησης».
25% — at most €25,000 a yearArt. 8(21Β): «με μέγιστο ποσό απαλλαγής στο φορολογικό έτος τις είκοσι πέντε χιλιάδες ευρώ (€25.000)».
25% — with Cyprus income over €30,000 a yearArt. 8(21Β), (iii) and second proviso (i): income from work or business in Cyprus «υπερέβαιναν τις τριάντα χιλιάδες ευρώ (€30.000)» in the first 12 months and in each year of the exemption.
25% — if you were not a Cyprus resident for the 7 years before returningArt. 8(21Β), (iv)–(v): a person who «δεν ήταν κάτοικος της Δημοκρατίας κατά τα επτά (7) φορολογικά έτη που προηγούνται» the start of work, but was resident in some year before those seven; (ii) — work started from 01.01.2025 «έως και το έτος 2030».
25% — for 7 years, once in a lifetimeArt. 8(21Β), second proviso (i): the exemption «κατά το έτος στο οποίο το άτομο αρχίζει να εργοδοτείται … και κατά τα αμέσως επόμενα έξι (6) φορολογικά έτη»; (iii): «άπαξ εφ’ όρου ζωής».

If you get the 50% exemption and plan to change jobs

The law and circular 4/2024 count any employment in Cyprus and describe filing a new Τ.Φ.59 with the new employer. The same department's FAQ says the opposite: changing employer ends the exemption. Before changing jobs, ask for a written ruling at [email protected].

Sources

Income Tax Law 118(Ι)/2002 — consolidated text (cylaw)www.cylaw.orgArt. 8(21Α), (21Β), (23Α): percentages, caps, periods, conditions and the ban on combining.
Ν.17(Ι)/2026 — the 25% exemption for returning residents (cylaw)www.cylaw.orgNew paragraph 8(21Β), in force retroactively from 01.01.2025.
Tax Department, circular 4/2024 on the 50% exemptionwww.gov.cyInterpretation of 8(23Α): what counts as starting work, what is pay in Cyprus (para 11), counting the 15 and 17 years, transitional rules, one exemption a year (paras 34–35), Τ.Φ.59 and return codes.
Tax Department, FAQ on the 20% exemptionwww.gov.cyNo minimum salary, not for the self-employed, first job only, Τ.Φ.59 with no application.
Tax Department, FAQ on the 50% exemptionwww.gov.cyThe first 12 months, documents to keep, Τ.Φ.59, rulings.