On 6 March 2026, the Cyprus Government published the long-awaited tax exemption under the “Minds in Cyprus” initiative, following its approval by the Council of Ministers in 2025. The initiative is designed to encourage talented professionals who have built their careers abroad to return to Cyprus by offering attractive tax incentives and supporting their reintegration into the local workforce and economy.

The new exemption, introduced under Article 8(21B) of the Income Tax Law, applies retrospectively from 1 January 2025 and complements the existing tax incentives available to individuals relocating to Cyprus for first employment.

The exemption is available to both employees and self-employed individuals who commence employment or business activities in Cyprus on or after 1 January 2025, provided their annual employment income or business profits exceed €30,000. Eligible individuals can benefit from a 25% exemption on their gross annual employment income or business profits, subject to a maximum annual exemption of €25,000, for a period of seven years from the commencement of their professional activities in Cyprus.

To qualify for the exemption, individuals must meet the following conditions:

  • Become a Cyprus tax resident.
  • Have not been a Cyprus tax resident for at least seven consecutive years prior to commencing employment or self-employment in Cyprus.
  • Have previously been a Cyprus tax resident before the required seven-year period of non-Cyprus tax residency.
  • Have been employed full-time outside Cyprus by a non-Cyprus tax resident employer, meeting one of the following requirements:
    • University degree holders: At least 36 months (3 years) of full-time employment within the 7 years preceding the commencement of employment or self-employment in Cyprus.
    • Non-university degree holders: At least 7 years of full-time employment immediately preceding the commencement of employment or self-employment in Cyprus.

The introduction of Article 8(21B) further strengthens Cyprus’ tax framework for attracting and retaining highly skilled professionals, reinforcing the country’s position as an attractive destination for experienced talent seeking to relocate or return.