Tax Exemptions on the First Employment: Clarifications

On 01.11.2022 the Tax Department has issued the Circular (Νο. 10/2022) for the purposes of clarifying new tax income exemptions for the practical application as well as conceptualizing the term “first employment”.

By virtue of the Circular, it should be noted that the first employment of an individual ceased to exist or never existed in the following instances:
a) when at any time in the past an individual had performed renumerated services based on the salary in the Republic of Cyprus, which did not form occasional employment.
b) when an individual terminates the first employment contract and signs a new employment contract with another employer, hence beginning another employment.
However, if an employer is a member of the same group of entities for accounting purposes, it is considered that the individual preserves the first employment.

c) when an individual has more than one employment with other employers that are in process alongside with the first employment. In such instances, the exemption will be applicable only for the remuneration from the first employment.

Additionally, “occasional employment” is defined as any full-time or part-time employment exercised in the Republic either:

a) under a contract of a total duration of 120 days, or

b) without a contract and the total duration of the employment does not exceed 120 days.