The 25% exemption for returning to Cyprus, article 8(21B)

You need this if

• You are starting employment or a business in Cyprus between 1 January 2025 and 31 December 2030.
• You were not a Cyprus tax resident in the seven years before the year you start — and you were a Cyprus tax resident in some year before those seven. That second half is what makes this the repatriation scheme.
• You hold a degree recognised by KYSATS and worked full time abroad for a foreign employer for at least 36 months within the 84 months before the month you start here; or you worked abroad full time for a foreign employer for the whole 84 months.
• You are self-employed. This is the only one of the three relocation exemptions that reaches profits from a business carried on in Cyprus.

You do not need this if

• You have never been a Cyprus tax resident. The scheme is for people coming back; the 50% and 20% exemptions are the ones written for first arrivals.
• Your income here will be under €30,000. The threshold is tested in the first twelve months and again in every year you claim.
• You are starting before 2025 or after 2030. The window is fixed by the article.
• You are already claiming the 20% or the 50% exemption for the same year: only one of the three may be claimed in a tax year.

• The month your employment or business in Cyprus starts — the 84-month test counts back from that month, not from the calendar year.
• Your degree certificate and, where it needs recognition, the KYSATS confirmation.
• Evidence of the foreign employment: payslips, employment contracts, and proof of social insurance contributions abroad covering either 36 months inside the last 84, or the full 84 months.
• Tax residence certificates from the foreign authority for the last seven years, and rental contracts or other evidence of living abroad.
• Evidence that you were once a Cyprus tax resident before those seven years — an old return, an assessment, or a residence certificate.
• Form T.D.59 for your employer, if you are employed.

1. 1

   Check the seven years, and the year before them

   Two conditions work together. You must not have been a Cyprus tax resident in the seven years preceding the year you start employment or business here — for a 2025 start, that is 2018 through 2024. And you must have been a Cyprus tax resident in some year before those seven. Someone who has never lived here does not qualify, however long they have been away.

2. 2

   Check the work test that fits you

   Either you hold a qualification recognised by KYSATS and were employed full time outside Cyprus by a foreign employer for at least 36 months in total within the 84 months before the month you start here, or you were employed full time outside Cyprus by a foreign employer for those 84 months. The department asks for evidence of both the qualification and the foreign employment.

3. 3

   Check the €30,000, first over twelve months and then every year

   Your remuneration from employment in Cyprus, or your profits from a business carried on in Cyprus, must exceed €30,000 over the first twelve months from the date it starts. After that, the exemption is available in any tax year in which that income again exceeds €30,000.

4. 4

   Be a Cyprus tax resident for the years you claim

   Unlike the 50% and 20% exemptions, this one is only for people who are Cyprus tax residents for the year claimed. There is one exception, and it is the sensible one: in the year you start, the exemption is still given if you did not manage to become a tax resident because the employment or business began late in the year.

5. 5

   Claim it through PAYE, or in your return if self-employed

   There is no application and no approval. An employee claims the exemption through the employer’s PAYE by filing form T.D.59; a self-employed person claims it in the return for the year. If you want the department’s formal view on your eligibility, ask for a tax ruling at taxruling@tax.mof.gov.cy under circulars 2015/13 and 2016/13.

6. 6

   Count the seven years, and do not expect them to stretch

   The exemption runs for seven consecutive tax years, starting with the year you begin employment or business in Cyprus. If you leave for a couple of years in the middle, you can claim again on your return for what is left — but the seven years are not extended. The department’s example: a start on 1 October 2025 gives 2025 to 2031; two years away in 2027 and 2028 leave 2029 to 2031.

What is exempt

25% of incomeEmployment remuneration or business profits from an activity carried on in Cyprus.

Annual ceiling

€25,000The most that can be exempted in one tax year.

Minimum income

over €30,000In the first twelve months from the start, and in every year the exemption is claimed.

Absence required

7 yearsNot a Cyprus tax resident in the seven years before the year of the start — and resident in some year before those seven.

Work test

36 of 84 months, or 84 monthsFull-time employment abroad with a foreign employer; the 36-month route also needs a KYSATS-recognised qualification.

Start window

1.1.2025 to 31.12.2030The employment or business has to begin inside it.

How long it runs

7 consecutive yearsFrom the year of the start, inclusive; absence does not extend it.

Self-employed

eligibleThe only one of the three relocation exemptions that reaches business profits.

• Reading this as a scheme for newcomers. It is the opposite: you have to have been a Cyprus tax resident at some point before the seven years of absence, and a person who has never lived here cannot use it.
• Counting the 84 months from January. The period counts back from the month in which employment or business starts in Cyprus, and a few weeks either way can decide it.
• Forgetting the residence condition in the middle years. The 50% and 20% exemptions do not care whether you became a Cyprus tax resident; this one does, for every year claimed except the starting one.
• Assuming the €25,000 cap is the exemption. The exemption is 25% of the income; the cap only bites above €100,000 of income, where 25% would exceed €25,000.
• Claiming it alongside the 20% or the 50% in the same year. One of the three per tax year — the calculator will show which of them is worth more on your numbers.
• Treating a foreign degree as automatically recognised. The article names KYSATS recognition, and that is a document to obtain rather than assume.
• Expecting the seven years to pause while you are abroad. They run whether you are here or not.

Anything marked “practice” is what the department does in the office, not a rule you can hold it to. Rules carry a source.

• The department’s page on the 25% exemptionThe conditions of article 8(21B), set out in order.
• The department’s FAQ on article 8(21B)Including the evidence to keep, the residence condition and the worked example of an absence.
• Form T.D.59 — the employee’s declaration for PAYE
• Income Tax Law 118(I)/2002Article 8(21B), introduced by amending law 17(I)/2026.

• Tax Department, “Απαλλαγή 25% (Σχέδιο Επαναπατρισμού Ταλέντων) — Άρθρο 8(21Β)”: the conditions, the €30,000 and €25,000 figures, the seven-year period and the residence requirement
• Tax Department FAQ on article 8(21B): the qualification and 36-or-84-month tests, the year-by-year conditions, the evidence, T.D.59, tax rulings, the one-exemption-per-year rule and the worked example of an absence
• Income Tax Law 118(I)/2002, article 8(21B), introduced by amending law 17(I)/2026