Regime Rate
50%
Under the 50% IT Exemption
Standard Top Rate
35%
without this regime
Duration
10 yrs
Maximum 10 years from application
Target Profile
Income Exemption
Cyprus
Tax Savings Illustration
Example: €150,000 Annual Gross Income
Under 50% IT Exemption
€37 500
Standard Rate
€36 750
Annual Saving
+€0
Eligibility Requirements
Who qualifies?
- Individuals with first employment in Cyprus earning >€55,000/year
How the Regime Works
Full details
50% exemption on employment income for 10 years. Extended to 17 years from 2022 (previously 10). Applicable from first year of Cypriot employment.
Regime vs Standard Rates in Cyprus
| Tax Type | Standard Rate | Under This Regime | Saving |
|---|---|---|---|
| Income Tax (top rate) | 35% | ~17.5% effective | -17.5pp |
Frequently Asked Questions
What is the 50% IT Exemption in Cyprus?
The 50% Exemption for High Earners is a special tax regime in Cyprus that provides 50% flat rate to qualifying individuals or entities. 50% exemption on employment income for 10 years. Extended to 17 years from 2022 (previously 10). Applicable from first year of Cypriot employment. Legal basis: Art. 8(21) IT Law; Amendment 2022.
Who is eligible for the 50% IT Exemption?
Eligibility for the 50% IT Exemption is limited to: Individuals with first employment in Cyprus earning >€55,000/year. Applicants typically must not have been Cyprus tax residents during a specified prior period. Always verify current conditions at the source: Art. 8(21) IT Law; Amendment 2022.
How much tax do you pay under the 50% IT Exemption?
The 50% IT Exemption exempts a significant portion of your qualifying income from Cyprus income tax. On a gross income of €150,000, this typically results in substantially lower tax compared to the standard 35% top rate.
How long does the 50% IT Exemption last?
The 50% IT Exemption lasts for 10 years from the year you first qualify. After this period, standard Cyprus tax rates apply unless you qualify for another regime or change tax residency.
How do I apply for the 50% IT Exemption?
Application procedures for the 50% IT Exemption are set out in Art. 8(21) IT Law; Amendment 2022. You typically need to file a formal application with Cyprus's tax authority after establishing residency. Consult a local tax advisor for guidance.
Other Special Regimes to Compare
Disclaimer: This information is for general guidance only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making residency or tax planning decisions.