The plenary of the House of Representatives has voted on the differentiation of criteria and provisions for a 50% tax discount granted to employees who are returning to Cyprus and earn an annual income exceeding €55,000. With a majority of 26 votes in favor and 14 abstentions, the Income Tax Law has been amended to introduce a tax exemption of 50% on their income for a period of seventeen tax years. This exemption remains in effect even if the individual changes employers, provided they were non-residents of Cyprus for at least fifteen years prior to their first employment, which is an increase from the previous requirement of ten years.

Under the previous legislative framework, individuals who had been non-residents of Cyprus for a minimum of ten consecutive years before commencing their first employment in the country and whose income from employment exceeded €55,000 annually were entitled to claim a 50% exemption from income tax for a period of seventeen years.

Those taxpayers who qualified for the exemption under the existing framework before the implementation of the new law will continue to benefit from this measure until the expiration of the seventeen-year period, as long as they remain employed by their initial employer.

Both current and new employees in Cyprus, who were not residents of the country for a fifteen-year period prior to their first employment, will be eligible for the tax exemption. Importantly, any previous employment within Cyprus prior to their relocation abroad will not be considered for the purpose of determining their eligibility.

The tax exemption will be granted for a consecutive period of seventeen tax years or until the legislation governing this measure is abolished, whichever occurs first.

These initiatives aimed at providing tax incentives and benefits to employees returning to Cyprus with higher incomes contribute to the concept of "brain gain." By attracting skilled professionals who have gained valuable experience abroad, Cyprus can benefit from their expertise and knowledge, creating a positive impact on the country's economy and development. The tax exemptions and differentiated criteria offer a compelling reason for talented individuals to return to Cyprus, as they are rewarded for their skills and contributions. This brain gain not only enhances the local workforce but also fosters innovation, entrepreneurship, and knowledge transfer, ultimately driving economic growth and competitiveness.