Cyprus expat tax exemptions: 50%, 25% and 20%, and which one you get
Cyprus attracts people with income tax exemptions rather than a flat rate, which means the interesting question is never the rate but whether you clear a qualifying test written years before you arrived. There are three of them, they are mutually exclusive, and the oldest one was widely reported closed in 2026 when it was not.
By Evdokiia Petrovskaia, Director, Dubir GroupFigures checked
Short version:if you are moving to Cyprus on more than €55,000 a year and you have not lived here for the past fifteen years, you want the 50% exemption. It runs for seventeen years and on a €100,000 salary it is worth about €15,900 a year in tax. The other two exist for cases where you can't get it.
The three exemptions
| 50% | 25% repatriation | 20% | |
|---|---|---|---|
| Exempt amount | 50% of remuneration | Lower of 25% and €25,000 | Lower of 20% and €8,550 |
| Salary floor | Over €55,000 | Over €30,000 | None |
| Runs for | 17 years | 7 years | 7 years |
| Prior absence needed | 15 consecutive years non-resident | 7 consecutive years abroad, after prior residence | 3 consecutive years non-resident |
| Open to new hires? | Yes | Yes, to 31 Dec 2030 | Yes, for employment started after 26 July 2022 |
What each is worth
Numbers rather than percentages, on the 2026 bands. Both columns are the income tax due for the year, calculated the way our Cyprus salary calculator does it.
| Exemption | Tax on €60,000 | Tax on €100,000 |
|---|---|---|
| None | €7,839 | €20,250 |
| 50% | €400 | €4,322 |
| 25% repatriation | €3,533 | €11,786 |
| 20% | €5,274 | €17,258 |
At €60,000 the 50% exemption very nearly eliminates the bill, because half of €60,000 lands close to the €22,000 tax-free threshold once social insurance and GESY are deducted as well.
The 50% exemption, in detail
Two tests. Your annual remuneration from the employment must exceed €55,000, and you must not have been a Cyprus tax resident for at least 15 consecutive years immediately before the employment started.
The salary test is gentler than it reads. There is a two-year grace period, so crossing €55,000 in your second year still qualifies you, and once you are in, a later drop below the threshold does not throw you out. The residency test is the unforgiving one: fifteen consecutive years is a long absence, and people who spent a few years in Cyprus in the middle of an otherwise foreign career are the ones who fail it.
The 25% repatriation exemption
Gazetted on 6 March 2026, backdated to 1 January 2025, and open to employments starting up to 31 December 2030. It exists for Cypriots and former residents coming home, the case the 50% exemption deliberately excludes.
You need to have been a Cyprus tax resident at some point, followed by at least seven consecutive years abroad; to earn over €30,000 here; and to hold a degree plus 36 months of full-time work abroad, or 84 months of work without one. The exemption is the lower of 25% of remuneration and €25,000, for seven years, so it caps out at a €100,000 salary and adds nothing above it.
The 20% exemption and why it is complicated
The oldest of the three, worth the lower of 20% and €8,550 for seven years, with only a three-year absence required, and it covers employment that started after 26 July 2022 with a non-resident employer abroad before that. Its seven years start in the year after the job does, not the year you arrive.
For most of 2026 it was reported closed. Several Cyprus firms wrote that the March 2026 amendment, N.17(I)/2026, shut it to new employments, and we said the same on this page until September, when we read the gazetted text ourselves: the law adds the 25% repatriation exemption straight after this one and says only that whoever gets the 25% cannot also get the 20%. Nothing repeals it or gives it an end date, and KPMG's April 2026 guide still lists it. If you are planning a hire around it, an accountant's written view is still worth having, because the Tax Department has not published a circular either way.
What the exemptions do not touch
- Social insurance and GESY are both calculated on full gross pay: 8.8% up to €68,904 of annual earnings, and 2.65% up to €180,000. An exemption on income tax does not reduce either.
- Your employer still pays 15.4% on top of gross, exemption or no exemption. See what an employer really pays in Cyprus.
- Dividends and investment income sit under domicile and the Special Defence Contribution, a separate regime with its own seventeen-year clock.
Put your own salary through the salary calculator and switch the exemption dropdown to see the difference on your actual pay, line by line.
Questions, answered
What is the 50% tax exemption in Cyprus?
Half of your employment income is exempt from Cyprus income tax for 17 years, if your annual remuneration exceeds €55,000 and you were not a Cyprus tax resident for at least 15 consecutive years before the employment started. On a €100,000 salary it cuts income tax from €20,250 to €4,322.
What happens if my salary drops below €55,000 later?
You keep the exemption. The €55,000 test applies at the start, with a two-year grace period: meeting it in your second year still qualifies you, and a later fall in pay does not remove it. The threshold is a gate you pass through, not a level you must maintain.
Is the 20% Cyprus exemption still available?
Yes. Some Cyprus firms reported that the March 2026 law, N.17(I)/2026, closed it to new employments, but we read the gazetted text and it does no such thing: it adds the 25% repatriation exemption next to it and says that anyone granted the 25% cannot also get the 20%. KPMG's April 2026 residency guide still lists it as available. It runs for seven years starting the year after your employment begins.
Can I claim more than one exemption at once?
No. The exemptions are alternatives, not layers. Where you qualify for more than one, you claim the one that is worth most, which above €55,000 of salary is almost always the 50% exemption.
Does the exemption reduce my social insurance too?
No, and this catches people out. The exemptions apply to income tax only. Social insurance at 8.8% and GESY at 2.65% are still calculated on your full gross salary, up to their own separate ceilings.
Is the 50% exemption the same as non-dom status?
No, they are separate reliefs that often apply to the same person. The 50% exemption reduces income tax on employment income. Non-domiciled status exempts you from Special Defence Contribution on dividends, interest and rent, and lasts until you have been a Cyprus tax resident for 17 of the last 20 years.
We had to get this right for ourselves first
Dubir Group builds software in Paphos: payroll and invoicing systems, internal tools, the reporting a company outgrows a spreadsheet for. The reading above is the reading we had to do anyway.