Tax incentives offered to attract international and Cypriot professionals to Cyprus have resulted in €406.6 million in tax exemptions over a three-year period, benefiting 25,277 employees who moved to the island for work between 2021 and 2023.

The total salaries declared by these employees reached €1.31 billion, with exemptions ranging between 20 and 50 per cent depending on individual cases.

The incentives are part of a broader policy framework to encourage the relocation of talent, including both foreign nationals and repatriated Cypriots, through income deductions and tax relief.

The figures were submitted to parliament in connection with the ongoing discussion by the finance committee of the ‘Minds in Cyprus’ bill, which aims to formalise and extend the tax breaks for professionals working abroad who relocate to the Republic for employment.

According to Philenews, which shared this data on Wednesday, just over 5,200 of the beneficiaries were Cypriots, who received a combined €84.8 million in tax deductions on salaries totalling €263.6 million.

However, the majority were foreign nationals, with Russian citizens ranking first.

Workers from Russia accounted for €156.9m in exemptions on total salaries of €513.8m, followed by Cypriots, while Greek professionals placed third with 2,825 employees receiving €32.9m in tax benefits for declared income of €111.1m.

The list also includes 1,339 Ukrainians who benefited from €17.9m in tax relief on salaries of €59.2m, and 781 Belarusians who received €13.6m.

A further 552 employees from Israel received €17.4m in exemptions on income of €52.5m, while 479 British workers benefited from €15.7m in deductions for salaries of €47.6m.

Tax incentives also applied to 441 Lebanese professionals with €5.4m in exemptions, 409 Indians with €5.5m, 259 Germans (€4.9m), 239 Italians (€4m), and 201 French nationals with total deductions of €6.8m.

In terms of economic sectors, the highest number of beneficiaries were employed in information and communication technologies, scientific services, and financial activities.

Specifically, 9,060 employees in ICT-related fields declared €450.2m in salaries and received €136.4m in exemptions.

Scientific and technical activities followed, with 5,973 employees earning €310.7m and receiving €96.5m in deductions.

Furthermore, 2,347 employees in financial and insurance services reported €182.5m in income and were granted €59.2m in tax relief.

Other sectors included administrative services (€24.7m), wholesale and retail trade (€26.1m), and transportation and storage (€13.7m), among others.

In addition, the data showed that 868 workers in the water supply and wastewater treatment sectors earned €23.1m and received €6.5m in deductions.

Also included were 758 employees in public administration and defence, who benefited from €14m in tax relief based on earnings of €45m.

In the education sector, 476 professionals received €4.1m in exemptions on income of €14.6m, while 415 workers in health and social care benefited from €6.5m in tax deductions on salaries of €21.4m.

Meanwhile this week’s session, the house finance committee continued its discussion of the bill to provide tax incentives to attract talent, both Cypriot and non-Cypriot, to work in Cyprus.

The concern of the bar association was raised by Maria Gregoriou, who referred to unequal treatment of taxpayers. This claim was rejected by a representative from the legal service.

According to the lawyers, the measure risks reinforcing the issue of brain drain, as it effectively encourages specialised professionals already living in Cyprus to move abroad temporarily in order to later benefit from exemptions.

Gregoriou also pointed out that there had been no public consultation, calling for adjustments.