Filenews 25 June 2025 - by Eleftheria Paizanou
At €406.6 million is the tax reduction which has benefited 25,277 employees who worked abroad and moved to Cyprus, taking advantage of the tax incentives currently provided by the state, through the granting of deductions and tax exemption from their incomes.
The specific data refer to the period 2021-2023 and the discounts given refer to salaries received by these employees, which reach €1.31 billion.
Under the current legal framework, tax exemptions range from 20% to 50%. On the occasion of the debate on Monday in the Parliamentary Committee on Finance of the "Minds in Cyprus" bill, which provides for the granting of tax exemptions to persons working abroad in order to move to Cyprus for work, data on the incentives given to workers to come to the Republic to work were cited in Parliament.
More Russians
Of the total 25,277 employees who benefited from the tax deductions, only 5,292 are Cypriots, the Tax Breakers received tax reductions of €84.8 million, for salaries of €263.6 million.
Analytically:
- In first place are workers from Russia, who were exempt from taxes of €156.9 million, compared to earnings of €513.8 million.
- This is followed by the Cypriots, who were 5,292 and benefited with exemptions of €84.8 million.
- In third place are 2,825 workers from Greece, who benefited from tax reductions of €32.9 million, having incomes of €111.1 million.
- 1,339 Ukrainian employees who had earnings of €59.2 million received tax rebates of €17.9 million,
- 781 persons from Belarus had a tax exemption of €13.6 million.
- 552 employees from Israel had a tax benefit of €17.4 million. from total revenues of €52.5 million
- 479 British workers benefited from tax deductions of €15.7 million, for taxable income of €47.6 million.
- 441 workers from Lebanon, with salaries of €18.4 million, received tax relief of €5.4 million.
- 409 workers from India "saved" an amount of €5.5 million. out of total earnings of 19.8 million euros.
- 259 from Germany with a salary of €15.4 million. had a tax exemption of €4.9 million,
- 239 employees from Italy with salaries of €12.8 million benefited €4 million, and
- 201 employees from France with salaries of €18.9 million received discounts of €6.8 million.
Software and scientific activities
From the analysis of taxpayers who have used tax incentives, it can be concluded that the majority of them work in the field of information and communication (including the software sector), scientific activities and financial and insurance activities.
In detail, the ten economic activities with the most employees benefiting from the incentives are the following:
- 9,060 information and communication workers received exemptions of €136.4 million, for total incomes of €450.2 million.
- 5,973 in scientific and technical activities, with total earnings of €310.7 million, received discounts of €96.5 million.
- 2,347 employees in financial and insurance activities, with earnings of €182.5 million. received tax exemptions of €59.2 million.
- 1,615 employees in administrative activities, with salaries of €80.1 million. received tax exemptions of €24.7 million.
- 1,366 employees in the retail and wholesale trade and vehicle repairs had earnings of €82.8 million. and received tax reductions of €26.1 million.
- 868 workers in the water supply and wastewater treatment sectors had earnings of €23.1 million. and discounts of €6.5 million.
- 760 transport and storage workers were paid €45.5 million. and received a tax exemption of €13.7 million.
- 758 employees in the Public Administration and Defence had salaries of €45 million. and tax reductions of €14 million.
- 476 employees in education and with incomes of €14.6 million. had tax exemptions of €4.1 million.
- 415 health and social care workers and with salaries of €21.4 million received tax reductions of €6.5 million.
Lawyers shout
On Monday, the Parliamentary Committee on Finance continued the discussion of the bill on the provision of incentives to talents - Cypriots and non-Cypriots - to work in Cyprus.
Maria Grigoriou expressed the concern of the Bar Association, referring to unequal treatment of taxpayers, something that the representative of the Legal Service rejected.
According to the lawyers, "the brain drain is strengthened because it is like telling specialized personnel who are in Cyprus to go abroad for a few years, so that they are subsequently entitled to claim tax exemption".
At the same time, he said that there was no public consultation, asking for a change in specific articles. The members of the Finance Committee stressed the need for the review of some provisions of the bill.
