Employment in Cyprus

Employment in Cyprus - Extension of the income tax exemption of €8,550 or 20% (whichever is lower) with respect to Article 8 (21)

On 15 December 2020, the Gazette amended the law with respect to Article 8 (21) of the Income Tax Legislation. This amendment aims to attract employees from abroad and to expand the current framework.

Article 8(21) allows a five-year exception from income tax of the lower of:

  • EUR 8.550
  • 20% of the remuneration arising from employment in Cyprus

for people that were not tax residents in Cyprus prior to the year of the beginning of their employment. The five-year exception starts in the year that follows the beginning of their employment in Cyprus. Before the amendment of the law, the last year for this exception was 2020.

The new amendment extends the exception up to employment that begins in 2025, while the duration of the exception an individual can receive remains the same; that is, five-years.

To illustrate, an individual who commences employment in Cyprus in 2025 will be eligible to claim the relevant tax exception for 2026-to-2030.

 


Governmental On-Going Economic Help for Covid-19 New Measures

The Ministry of Labour, Welfare and Social Security, announces Special Schemes regarding financial support new measures for the second wave of Covid-19 pandemic. The Special Schemes can be found here: https://www.pio.gov.cy/ανακοινωθέντα-άρθρο.html?id=16660#flat (Greek only).

 


Updates for outstanding VAT payments for returns that were suspended until 10 November 2020

The House of Parliament, on October 30, 2020, passed an amendment to the VAT Act. The amendment extends the payment for the outstanding amounts arising from the VAT returns that payments were suspended until 10 November 2020.

The repayment of the amounts due can be made in six (6) equal installments from November 10, 2020 to April 10, 2021 without the imposition of additional charges and interest on these amounts. The exemption from the imposition of additional charges and interest applies to all cases of VAT returns for which the payment was suspended until November 10, 2020, whether it concerned a quarterly or monthly VAT return. VAT returns for which there was no right to suspend payments until 10 November 2020 are not included in the current amendment and are subject to additional charges and/or interest.

Thus, based on the new amendment, the VAT amount due should be paid in six (6) equal installments, and the corresponding amount should be paid on the 10th of each month starting from November 10, 2020 (i.e. on 10/11/2020, 10/12/2020, 10/1/2021, 10/2/2021, 10/3/2021 and 10/4/2021).

There is also the possibility to pay the VAT amount due, in fewer, continuous, monthly installments starting from November 10, 2020.  *For any questions, clarifications or if you would like to further discuss the possible impact of the Circular on your business, please contact us.


Deadline extension

Submission of 2019 personal income tax (TD1) returns to 30 November 2020

Following a Decree published on 16 October 2020, the deadlines for submission without a penalty is extended to 30 November 2020: 

Submission of the 2019 personal income tax returns by

  • employees and pensioners(TD1 –Employee) and
  • self-employed individuals (TD1 – Self-employed) with a turnover that does not exceed €70,000, and
  • the payment of their relevant tax due.

Please note: Obligation for Submission of an Income Tax Return of (TD1 – Employee) and (TD1 – Self-employed) for 2019 is ONLY applicable if the gross income exceeds €19.500.

The submission of personal income tax returns will be available for electronic submission through TAXISnet.

*For any questions and/or clarifications please contact us.


Submission of Personal Income Tax Return 2019 (IR.1)

The Tax Department advices that the Personal Income Tax Return (IR.1 Employee and IR.1 Self-employed without audited accounts) for the tax year 2019 is available for submission through the TaxisNet System at https://taxisnet.mof.gov.cy/login.jsp.

Necessary condition for the submission of the above Return, is the electronic registration in the TaxisNet System - Direct Taxation.

Please note that the latest date for submission of the Individual Income Tax Return is 30th October 30, 2020.

Useful information can be found on the website of the Tax Department www.mof.gov.cy/tax, under the icon "Income Tax Return 2019".


Government Support Continues for Covid-19: Applications for special plan support regarding businesses, employees and unemployed (1/9/2020-30/9/2020)

The applications for all the Special Plans for the period from 1 September 2020 to 30 September 2020 have been posted on the special website www.coronavirus.mlsi.gov.cy. It is reminded that the Special Plans for which applications are submitted for the above period are the following:

  1. Special Plan for Hotel Units and Tourist Accommodations (https://www.coronavirus.mlsi.gov.cy/7-measure1)
  2. Special Plan for Economic Activities Related to the Tourism Industry or Economic Activities that are directly affected by Tourism or Economic Activities related to Companies that are under Mandatory Full Suspension (https://www.coronavirus.mlsi.gov.cy/7-measure2)
  3. Special Plan for Complete Suspension of the Company’s Operations (https://www.coronavirus.mlsi.gov.cy/7-measure3)
  4. Special Plan for Businesses of Certain Financing Activities (https://www.coronavirus.mlsi.gov.cy/7-measure4)
  5. Special Unemployment Support Plan (https://www.coronavirus.mlsi.gov.cy/7-measure5)
  6. Special Plan for Certain Categories of Self-Employed Employees (https://www.coronavirus.mlsi.gov.cy/7-measure6)

 

Samples of the Certified Accountant Report that must be submitted electronically together with the respective application have also been posted on the special website www.coronavirus.mlsi.gov.cy.

It is emphasized that the deadline for electronic submission of applications for participation in the Special Plans for the period from September 1, 2020 to September 30, 2020 is Tuesday, October 6, 2020.

 

Interested parties are invited to submit their application in a timely manner, as online applications will not be available for use after the above deadline and any requests for late applications will not be accepted.

It is emphasized that in order for the payment of the Special Allowances to be possible, the appropriate Bank Account Details Statement mentioned in each application must be submitted if it has not already been submitted and confirmed.


COVID 19 Travel Information - Six Downgrades and One Upgrade as of September 24

As of September 24, six countries are being downgraded and one is being upgraded according to an announcement by the Ministry of Health.

The changes are as follows:

  • Canada moves from Category A to Category B
  • Norway moves from Category A to Category B
  • Austria moves from Category B to Category C
  • Slovenia moves from Category B to Category C
  • Portugal moves from Category B to Category C
  • Switzerland moves from Category B to Category C
  • Serbia moves from Category C to Category B

Category A – Low-risk countries at this stage

  • Member States of the European Union: Germany, Latvia, Lithuania, Finland
  • Third Countries: Australia, New Zealand, South Korea, Thailand

***Please note that for passengers from Category A countries, a COVID-19 laboratory test certificate and/or self-isolation ARE NOT required.

Category B – Countries with potentially low risk but with higher doubt compared to Category A

  • Member States of the European Union: Belgium, Denmark, Estonia, Greece, Ireland, Italy, Poland, Sweden, Slovakia
  • Small states: Vatican City, San Marino
  • Third Countries: China, Canada, Georgia, Morocco, Uruguay, Japan, Rwanda
  • United Kingdom
  • Members of the Schengen Area: Iceland, Liechtenstein, Norway

It is noted that passengers coming from Category B countries are required to have undergone a COVID-19 laboratory test in the last at least 72 hours before departure and to have a Certificate proving a negative PCR test for the virus.

It is also clarified that passengers from category B countries falling into the following categories may undergo the molecular examination upon arrival in the Republic:

  1. Cypriot citizens and members of their families (their foreign spouses, minor children and their parents),
  2. all legal residents of the Republic,
  3. persons entitled under the Vienna Convention;
  4. persons regardless of nationality, that in their country of residence laboratory analysis service is NOT provided (public or private) and they wish to travel to the Republic of Cyprus and upon relevant announcement.

*** It is noted that the cost of the examination is covered by them and they should remain self-isolated until the result of the test is issued.

Category C – Countries at increased risk compared to Categories A and B

  • Member States of the European Union: Austria, Bulgaria, France, Croatia, Czech Republic, Hungary, Luxemburg, Romania, The Netherlands, Spain, Malta, Slovenia, Portugal
  • Third Countries: Andorra, Algeria, Serbia, Morocco, Montenegro, Tunisia, Russia, Ukraine, Faroe Islands, Egypt, United Arab Emirates, Israel, Lebanon, Qatar, Bahrain, Saudi Arabia,
  • Small states: Monaco
  • Members of the Schengen Area: Switzerland
  • And any other country that is not included in Categories A or B

According to the Decontamination Decree (No. 30) of 2020
(https://www.pio.gov.cy/coronavirus/diat/50.pdf) only certain categories of citizens who have the right to enter the Republic are allowed to enter the Republic. They have the ability to choose to undergo a diagnostic test for COVID-19 disease upon arrival in Cyprus (60 euros) or to have with them a PCR Covid-19 certificate with a negative result at least 72 hours before departure. It is noted that these individuals should remain in self-isolation for 14 days regardless of whether the result of the COVID-19 laboratory test is positive or negative. Relevant health instructions can be found by following the link: https://www.pio.gov.cy/coronavirus/info.html.

***Citizens arriving from Category C countries must undergo a COVID-19 molecular test 48 hours before the end of their 14-day self-limitation period at their own expense. The result of the laboratory test must be sent to monada@mphs.moh.gov.cy.

***However, the self-isolation ends on the 14th day even if the result of the repeated laboratory test is negative. 

Only the following categories of passengers shall be allowed to travel to the Republic of Cyprus from Category C countries: 

  1. Cypriot citizens, their alien spouses, and under-age children,
  2. Persons residing lawfully in the Republic,
  3. Persons allowed to enter the Republic under the Vienna Convention,
  4. Persons regardless of nationality may enter Cyprus following a special permit by the Republic of Cyprus.

Cyprus Flight Pass

It is emphasized that all passengers, regardless of country Category, are required to apply for the CyprusFlightPass (https://cyprusflightpass.gov.cy/) within 24 hours before the departure of their flight. In addition, for the purposes of ensuring Public Health and surveillance of the epidemiological picture, a COVID-19 sample molecular laboratory test will be performed on passengers of selected arriving flights.

The law provides for a fine of 300 euros for those passengers who arrive in the Republic of Cyprus without holding the necessary travel card (CyprusFlightPass), even if they have filled in the relevant documents by hand.

In this case, the following two options are given:

  • To enter the Republic, where they will be fined 300 euros or
  • To return to their country of departure

Passengers arriving in the Republic of Cyprus from Category A countries without holding this document will be treated as Category B passengers. Therefore, in adding to the payment of 300 euros fine, they will be required to carry out a laboratory Covid-19 test at the respective airport of the Republic, paying the amount of 60 euros for the test.

***In addition, for the purposes of ensuring public health and surveillance of the epidemiological picture, a COVID-19 molecular laboratory test will be randomly performed on passengers of selected arriving flights.


Refund of credit balance for TAX/VAT

The Tax Department refers to the recent amendments to the Legislations on:

  • Certification and Collection of Taxes, Law N.126(I)/2020
  • Tax Added Value Law, N.122(I)/2020

in relation to the return of credit balance for Tax/VAT and advises that Tax/VAT credit balance will NOT be refunded to a taxable person/company that have failed to submit the relevant tax returns required by the above Legislations.

Specifically, a request from a taxable person, for a refund of the Tax balance/VAT will be rejected if the taxable person have failed to submit the relevant tax returns. When the taxable person/company complies with the above Legislations, the application for refund must be re-applied in accordance with the provisions of applicable law.Information on the latest amendments to the Legislation can be found at:

•       Interpretation Circular 46 - Income Tax (in Greek)

•       Interpretation Circular 242 - Value Added Tax (in Greek)


New Travel Announcement 1809

Estonia, Georgia, the Czech Republic and Hungary are changing travel category

As of September 18, four countries are being downgraded and two are being upgraded according to an announcement by the Ministry of Health.

The changes are as follows:

  • Estonia moves from Category A to Category B.
  • Georgia moves from Category A to Category B.
  • The Czech Republic moves from Category B to Category C.
  • Hungary moves from Category B to Category C.
  • Rwanda moves from Category C to Category B.
  • Australia moves from Category B to Category A.

Category A – Low-risk countries at this stage

  • Member States of the European Union: Germany, Latvia, Lithuania, Finland
  • Members of the Schengen Area: Norway
  • Third Countries: Australia, Canada, New Zealand, South Korea, Thailand

***Please note that for passengers from Category A countries, a COVID-19 laboratory test certificate and/or self-isolation ARE NOT required.

Category B – Countries with potentially low risk but with higher doubt compared to Category A

  • Member States of the European Union: Austria, Belgium, Denmark, Estonia, Greece, Ireland, Italy, Poland, Portugal, Sweden, Slovakia, Slovenia
  • Small states: Vatican City, San Marino
  • Third Countries: China, Georgia, Morocco, Uruguay, Japan, Rwanda
  • United Kingdom
  • Members of the Schengen Area: Switzerland, Iceland, Liechtenstein

It is noted that passengers coming from Category B countries are required to have undergone a COVID-19 laboratory test in the last at least 72 hours before departure and to have a Certificate proving a negative PCR test for the virus.

It is also clarified that passengers from category B countries falling into the following categories may undergo the molecular examination upon arrival in the Republic:

  1. Cypriot citizens and members of their families (their foreign spouses, minor children and their parents),
  2. all legal residents of the Republic,
  3. persons entitled under the Vienna Convention;
  4. persons regardless of nationality, that in their country of residence laboratory analysis service is NOT provided (public or private) and they wish to travel to the Republic of Cyprus and upon relevant announcement.

*** It is noted that the cost of the examination is covered by them and they should remain self-isolated until the result of the test is issued.

Category C – Countries at increased risk compared to Categories A and B

  • Member States of the European Union: Bulgaria, France, Croatia, Czech Republic, Hungary, Luxemburg, Romania, The Netherlands, Spain, Malta
  • Third Countries: Andorra, Algeria, Serbia, Morocco, Montenegro, Tunisia, Russia, Ukraine, Faroe Islands, Egypt, United Arab Emirates, Israel, Lebanon, Qatar, Bahrain, Saudi Arabia,
  • Small states: Monaco
  • And any other country that is not included in Categories A or B

According to the Decontamination Decree (No. 30) of 2020
(https://www.pio.gov.cy/coronavirus/diat/50.pdf) only certain categories of citizens who have the right to enter the Republic are allowed to enter the Republic. They have the ability to choose to undergo a diagnostic test for COVID-19 disease upon arrival in Cyprus (60 euros) or to have with them a PCR Covid-19 certificate with a negative result at least 72 hours before departure. It is noted that these individuals should remain in self-isolation for 14 days regardless of whether the result of the COVID-19 laboratory test is positive or negative. Relevant health instructions can be found by following the link: https://www.pio.gov.cy/coronavirus/info.html.

***Citizens arriving from Category C countries must undergo a COVID-19 molecular test 48 hours before the end of their 14-day self-limitation period at their own expense. The result of the laboratory test must be sent to monada@mphs.moh.gov.cy.

***However, the self-isolation ends on the 14th day even if the result of the repeated laboratory test is negative. 

Only the following categories of passengers shall be allowed to travel to the Republic of Cyprus from Category C countries: 

  1. Cypriot citizens, their alien spouses, and under-age children,
  2. Persons residing lawfully in the Republic,
  3. Persons allowed to enter the Republic under the Vienna Convention,
  4. Persons regardless of nationality may enter Cyprus following a special permit by the Republic of Cyprus.

Cyprus Flight Pass

It is emphasized that all passengers, regardless of country Category, are required to apply for the CyprusFlightPass (https://cyprusflightpass.gov.cy/) within 24 hours before the departure of their flight. In addition, for the purposes of ensuring Public Health and surveillance of the epidemiological picture, a COVID-19 sample molecular laboratory test will be performed on passengers of selected arriving flights.

The law provides for a fine of 300 euros for those passengers who arrive in the Republic of Cyprus without holding the necessary travel card (CyprusFlightPass), even if they have filled in the relevant documents by hand.

In this case, the following two options are given:

  • To enter the Republic, where they will be fined 300 euros or
  • To return to their country of departure

Passengers arriving in the Republic of Cyprus from Category A countries without holding this document will be treated as Category B passengers. Therefore, in adding to the payment of 300 euros fine, they will be required to carry out a laboratory Covid-19 test at the respective airport of the Republic, paying the amount of 60 euros for the test.

***In addition, for the purposes of ensuring public health and surveillance of the epidemiological picture, a COVID-19 molecular laboratory test will be randomly performed on passengers of selected arriving flights.