Cabinet approves tax incentive bill in tangible step towards ‘brain gain’

Government Spokesperson Konstantinos Letymbiotis has revealed more about the Government's effort to encourage skilled Cypriots working overseas to return to the island.

Speaking after the Cabinet meeting and the approval of a bill encompassing tax incentives for repatriating Cypriots, Letymbiotis said that "today's decision by the Cabinet substantially confirms the political will of the Government for the implementation of the Talent Repatriation Plan, as presented by the President of the Republic.

The tabling of the bill concerning the tax framework constitutes another decisive step towards achieving a strategic goal of national importance: The reversal of the drain of scientific and professional potential and the transition to a new era of brain gain for Cyprus.

Strengthening tax incentives, in a targeted manner, is not simply a tool for attracting talent from abroad; it is an act of political substance that sends the message that the Republic of Cyprus invests in its people, in the talent of our compatriots, and actively seeks the repatriation of Cypriots who possess valuable experience, expertise and knowledge.

At a time when economic conditions in Cyprus remain consistently favorable and macroeconomic indicators strengthen confidence in the country's progress, we are creating attractive and competitive prospects for the return and utilszation of human capital that was once forced to seek opportunities abroad.

The amending bill under submission provides for an income tax exemption of 25% and a maximum limit of €25,000 for scientists and professionals who have worked abroad for seven years after completing their studies.

At the same time, flexibility is being introduced in the eligibility criteria, in order to facilitate the return of professionals who can directly contribute to the innovation, productivity and competitiveness of our economy.

Of particular importance is the fact that this initiative does not entail any direct fiscal cost, as it targets exclusively new taxpayers, strengthening the tax base in the medium term and adding lasting value to fiscal stability.

The provision for an evaluation of the framework every five years ensures its dynamic adaptation to socio-economic developments, further strengthening the effectiveness of the measure.

The Cabinet authorised the Minister of Finance to immediately submit the bill to the House of Representatives for voting.

Today's decision is an intervention of a comprehensive Action Plan for the Repatriation of Talent which is under formulation and will be presented at the first relevant event in London on 21 May, 2025 under the President of the Republic.

With decisions like today's, the Government proves that it is building a Cyprus with self-confidence, that does not accept the drain of talent as a fait accompli, but intervenes with a plan, vision and perspective to bring back those forces that can transform it, giving our country the future it deserves."

Also read: President Christodoulides announces incentives for Cypriots working abroad to return

(Source: InBusinessNews)