Parliament’s Finance Committee will begin discussions today, Monday, regarding a new bill that introduces tax incentives aimed at encouraging the repatriation of talented Cypriots living abroad—a strategy commonly referred to as brain gain. The bill, approved by the Council of Ministers on April 24, forms part of the "Minds in Cyprus" campaign initiated by President Nikos Christodoulides.

According to the explanatory report submitted to Parliament, the bill seeks to strengthen the competitiveness of the Cypriot economy by attracting skilled professionals from abroad, including those from the Cypriot diaspora. At the same time, the Republic of Cyprus hopes to benefit from the expertise and experience of these individuals while broadening its tax base.

The new bill updates and enhances the current framework implemented in 2022, making it more attractive and flexible. Under the existing scheme, a tax exemption of 20%—or up to €8,550, whichever is lower—is granted to individuals who had worked abroad for three consecutive years prior to beginning employment in Cyprus between July 26, 2022, and 2027. The exemption applies for seven tax years.

Under the proposed amendments, the exemption rate will increase from 20% to 25%, and the cap will rise from €8,550 to €25,000.

Additionally, the required period of employment outside Cyprus will be relaxed: the current requirement of three consecutive years will be replaced by a condition of at least 36 months of employment within the past five years.

Furthermore, the timeframe within which a person must return to Cyprus after completing their studies to qualify for the exemption will be shortened from fifteen to seven years.

Lastly, the framework will be reviewed every five years to ensure it remains responsive to socioeconomic developments and continues to deliver results.