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No tax exemption for special-status staff at Cyprus embassies

June 11, 2019 at 8:56am
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Parliament has sent back to Cabinet a draft bill providing that local staff who are not civil servants but are employed at Cyprus embassies should also pay taxes.  And what is certain is that as of January 1, 2020, this category of employees will also have to pay income tax.  Because of legal gaps, a number of these employees have never paid taxes either in Cyprus or in the country where they work.

A Tax Department spokesman yesterday told the House Finance Committee that these employees should be taxed either in Cyprus or in the country where they work. And that their salary should be taxed, but it is not clear yet whether this measure will also apply to additional income from benefits such as rent allowance. A number of Cypriots who are not civil servants are employed at the Republic’s diplomatic missions but under two different regimes.

The first category concerns embassy employees who, although they work at overseas missions, their tasks are only related to the central government. According to a Foreign Ministry spokesperson, the government will diversify the process of renewing the contracts of these employees. The spokesperson also said that under consideration is the possibility that these contracts should be for five years with a renewal prospect for another two years.

The second category of embassy employees concerns local staff who also perform diplomatic duties. The contracts of these employees date back to 2007 and, under a European directive, they have been converted to an indefinite time even though these employees have never paid taxes. Relevant government departments are now looking into pay scales that these employees should come under, according to the Ministry spokesperson.

 

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