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Panel Discussion at the 3rd Cyprus International Investors Summit: Taxes, Benefits and Living

Panel Discussion at the 3rd Cyprus International Investors Summit: Taxes, Benefits and Living

The second panel at the 3rd Cyprus International Investors Summit was about the benefits for employers and employees living and working in Cyprus, as well as personal taxation and tax incentives for expatriate and high net worth individuals relocating.

Costas Markides, tax partner of International Tax Services at KPMG Cyprus, talked about the tax residency rules for individuals.  The 183 days rule means an individual who stays in Cyprus for a period (or periods) exceeding in aggregate 183 days in the tax year, and  the 60 days rule means an individual may be considered a Cyprus tax resident if s/he: a) does not spend more than 183 days in any other jurisdiction during the tax year; b) not considered to be a tax resident in any other country during the tax year; and c) Cumulatively the following conditions are met: the individual spends at least 60 days in Cyprus during the tax year, exercises a business in Cyprus as self-employed, is employed by a Cyprus company or holds an office in a Cyprus company at any time during the tax year and maintains a permanent home in Cyprus (by owning or leasing).

Markides also explained to the potential investors at the summit, the concessions available to expatriates. “Individuals that were tax residents outside Cyprus and are commencing employment in Cyprus, may be entitled to certain exemptions” he said.

There is the 50% exemption rule, meaning individuals who take up employment in Cyprus with an annual gross income in excess of €100.000 will be eligible for an exemption from taxation of 50% of their income for a period of 10 years, commencing from the year of employment. The 20% exemption rule is for individuals who take up employment in Cyprus will be eligible for an exemption from taxation of up to 20% of their gross income or €8.550 (whichever is lower) from any employment which is exercised in Cyprus (this concession will cease in the year 2020), and lastly, there is the overseas pension income, which means that overseas pensions are exempt from tax for up to an amount of €3.420 and taxed at 5% thereafter. The taxpayer may opt to be taxed in the normal way, where this special mode of taxation of income results to a higher tax liability (this selection can be made from year to year).

Michalis Antoniou, Director General of Cyprus Employers & Industrialists Federation (OEB), discussed employment law and the labour market employment. More specifically, Antoniou explained the labour costs in Cyprus for different positions but the general wage setting system relies on negotiations between the two parties, and “there is no obligation to grant pay rises unless otherwise agreed.” Additionally, he mentioned that  indirect Labour cost entails statutory contributions to various Funds such as Social Insurance Fund (7,8%), Redundancy Fund (1,2%), Social Cohesion Fund (2%) and the Human Resource Development Authority Fund (0.5%).  Antoniou also mentioned that upcoming increases in 2019, will include a social Insurance contributions rise by 0.5% and contributions to the National Health System will commence (March 2019) to which the employer will contribute 1.85% on gross wages (March 2020 – 2.9%).

The director of PwC, Michalis Stavridis also stated that “Cyprus is an established and tested employer friendly location”.

Maria Diamanti, Associate, L Papaphilippou & Co LLC, discussed the Cyprus Investment Programme, and how someone can apply for it.

Beyond the tax advantages offered to investors, it was noted that Cyprus also offers an extremely attractive lifestyle, such as security and safety for the whole family, excellent public and private international schools, high standard of living and healthcare, culture, history and art, fabulous weather and it was also ranked 5th worldwide and 1st among smaller Countries in its Safest Countries in the World.

 

About

The 3rd Cyprus International Investors Summit presents investment opportunities in the Property, Real Estate and Leisure sectors in Cyprus and it is organised by Invest Cyprus. This event is a perfect platform for institutional investors, investment firms, real estate agents, citizenship specialists, real estate lawyers, family offices and property/leisure fund providers to network with local companies involved in the sales and promotion of the real estate/leisure markets.

 

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