M.Hadjitofi LLC

📢The Plenary of the House of Representatives has approved today the first comprehensive reform of the Cyprus tax system since 2002, introducing significant changes to corporate taxation, incentives, and anti-evasion measures.

The measures are subject to official publication of the law in the Official Gazette.

Key measures and changes include:

CORPORATE MEASURES

· Corporate tax rises to 15% from 12.5%;
· Special Defence Contribution (SDC) on dividend distributions will drop sharply from 17% to 5% for profits earned after 1 January 2026;
· Abolishment of the stamp duty;
· Abolishment of deemed dividend distribution for profits earned after 1 January 2026;
· Removal of the special defence contribution on rental income;
· Extension of the loss carry-forward period from five to seven years;
· The 120% super-deduction for research and development expenses of an intangible asset is extended until 2030;
· The maximum limit of entertainment expenses deductible for tax purposes is increased to €30,000, from €17,086;
· Increase of the tax-free threshold on capital gains to €30,000

ANTI-TAX EVASION MEASURES

· Mandatory payment of rent over €500 via bank transfer or electronic payment from 1 July 2026;
· The Tax Commissioner will be able to request the submission of a statement of assets and liabilities covering a period of six years and the mandatory keeping of data supporting the tax return for six years;
· The Tax Commissioner has also been granted unprecedented enforcement powers, including the ability to seal non-compliant businesses and freeze company shares for debts exceeding €100,000.

PERSONAL TAX CHANGES

· The tax-free allowance is increased to €22,000;
· New tax brackets set rates at 20% for income between €22,001 and €32,000, 25% for €32,001 to €42,000, 30% for €42,001 to €72,000, and 35% above €72,001;
· Introduction of graduated child and student deductions up to age 24. Families receive €1,000 for the first child or student, €1,250 for the second, and €1,500 for the third and subsequent children;
· Introduction of the following additional deductions: €2,000 deductions for performing loan interest and rent, €1,000 for green home investments including electric vehicle purchases, and up to €500 for home insurance premiums against the risk of natural disasters.

📢 Implementation of the EU Blue Card Scheme in Cyprus – Effective as of 7 July 2025

Cyprus has officially announced the commencement of the EU Blue Card Scheme, effective as of 7 July 2025. This follows the recent introduction of the EU Blue Card framework into the Aliens and Immigration Law, Cap. 105, by virtue of Laws 111(I)/2024 and 149(I)/2024.

📌 The EU Blue Card is a work and residence permit aimed at highly skilled professionals from non-EU countries, enabling them to work and reside in most member states of the European Union.

📌The scheme is particularly targeted at the following industries: Information and Communication Technology (ICT), pharmaceutical research, and the maritime industry.

✅️Applicants must inter alia be third country nationals with a valid job offer or employment contract, have a permanent place of residence in Cyprus, hold a valid residence permit or visa in Cyprus, possess a university degree or at least 3 years of IT work experience and receive a minimum annual gross salary of Euro 43,632.

The EU Blue Card is initially issued for a minimum period of 24 months, with the option to apply for a renewal within 3 months before its expiry.

🌍This initiative is aimed at positioning Cyprus as a sustainable business hub within the European region. It also offers flexibility for mobility across various Member States positioning Cyprus as an ideal destination for professionals looking to benefit from the Cyprus tax regime and advance their careers in a dynamic and evolving environment.

M. Hadjitofi LLC is able to provide further information upon request as well as undertake the filing of applications under this new scheme.

M. HADJITOFI LLC – Corporate Lawyer Vacancy

We are currently seeking to recruit a Corporate Lawyer to join our law firm in Larnaca.

Qualifications:

• At least 4 years of corporate and commercial law experience;
• A good understanding of the Financial and Investment Regulatory framework of Cyprus will be considered an advantage;
• Bachelor’s Degree in Law (LLB);
• Cyprus Bar Association qualified;
• Excellent verbal and written communication skills in Greek and English;
• Excellent time management, administrative and organizational skills;
• Strong team orientation, ability to work collaboratively in a team setting;
• Character Integrity, Confidentiality and Professionalism;
• Computer Literate (Microsoft Office).

Responsibilities include:

• Drafting, reviewing and negotiating agreements including joint venture/shareholders’ agreements, subscription agreements, securitization documents and other documents;
• Handling cross-border reorganizations including mergers, conversions, divisions and redomiciliations;
• Conducting legal research on relevant laws, regulations, and legal precedents;
• Research, provide opinions and prepare analysis on compliance related issues;
• Respond promptly and efficiently to client inquiries regarding corporate legal matters;
• Undertaking legal due diligence of Cyprus companies;
• Drafting legal memorandums and legal opinions;
• Providing assistance in immovable property transactions;
• Drafting court petitions/applications pursuant to the Companies Law Cap.113;
• Handle the communication with local, regulatory and other supervisory authorities;
• Assisting the team with compliance and administrative work;
• Assisting on the efficient management of workflow of the team.

Benefits:
• Competitive Salary & Benefits;
• Inclusive Culture: We foster a supportive and engaging environment where everyone feels supported and inspired;
• Professional Growth: Opportunities for career advancement and professional development within a dynamic law firm;
• Outstanding office in central location in Larnaca.

Interested parties can send their curriculum vitae to [email protected] and [email protected] quoting the above job title.

All applications will be treated as strictly confidential.

📢 On 20th December 2024, the Minister of Labour and Social Insurance issued a Decree (the “Decree”) pursuant to the authority granted under subsection 6 of Section 11 of the the Transparency and Predictability in the Workplace Law (Ν. 25(I)/2023), as amended from time to time (the "Law").

📌The Decree outlines the procedure for registering essential employment terms in the ERGANI information system and other details pertaining to the system's operation and the specific obligations of every employer. It also establishes the registration period for the required information, which is set between 2nd January 2025 and 28th February 2025.

‼️Failure to meet the specific deadline may result in the imposition of a fine under Section 27 of the Law and/or the imposition of additional penalties, including fines and/or imprisonment under Section 27A of the Law.

Please contact us for more information or assistance.