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Cyprus: Offshore Legal and Tax Regimes

Tax Treatment of Foreign Employees of Offshore Operations

This section refers to the taxation of foreign employees of offshore operations. For general principles of individual taxation in Cyprus, which also apply to the resident employees of offshore entities, see Income Tax.

Salaries derived from services provided outside Cyprus for more than 90 days to a non Cypriot resident employer or in the permanent establishment of a Cypriot resident employer are not taxed in Cyprus.

Expats recently employed in Cyprus gain a partial exemption on their income tax. For the first three years of their employment, starting from 1 January of the year after employment started, newly resident employees are exempt from tax on 20% of their salary or €8,550, whichever is lower.

Similarly, any expat earning more than €100,000 enjoys a 50% exemption on their income tax for the first five years.



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