Author: administration

Newsletter 001/2021

                                                10^th January 2021

Changes in 2021

Social Insurance maximum insurable income increase, National Health Insurance System Contributions and change of Income Tax Legislation concerning the tax allowances

Fairfax Ltd wishes to inform all employers about the changes that will be put in effect in 2021.

SIF Insurable Income increase

According to the provisions of the Social Insurance Law of 2010 the rate of social insurance contribution is applied to a maximum level of earnings. The maximum level of yearly insurable earnings up to 2020 was €54,864, while from 2021 the maximum level of  insurable income will be increased to €57,408 per annum.

There will be no further change at the contribution rates currently in effect.

National Health Insurance System

Employer and employee contributions remains the same.

Employers continue to contribute 2.90% on the employee’s earnings, and the employees will contribute 2.65% .The employer is responsible for paying both their own and their employees’ contributions through Social Insurance or Income Tax Office Services, depending on the nature of income, by means of deductions/contributions on their salary.

It should be noted that NHIS contributions are paid on all employee earnings (as earnings are defined in the Social Insurance and Income Tax Law) up to €180,000. There is no indication now that the maximum income for NHIS purposes will be increased.

Tax Allowances

20% or Max amount of EUR 8,550 annual exemption

On 15th December 2020, an amendment of the article was put in force. The purpose of the amendment is to extend the application of the 20% tax exemption for expats working in Cyprus. The amendment of the article applies until the tax year 2030.

The exemption is available for a period of 5 years for employment commencing during or after 2012 and it applies from the tax year following the year of commencement of the employment.

How can we help?

Explore the benefits of engaging the Fairfax team to assist you by outsourcing your payroll function to us. Contact our them on +357 25558025 or at accounts@fairfaxyeaman.com.

Visit our website www.fairfaxyeaman.com

 

Many thanks,

Fairfax Team

 

We would like to happily announce that Eirini Mantzavela has completed her diploma in Human Resources Management at the Adonis Academy in Cyprus. Eirini is an asset to our organization and has grown to be a very important part of our team helping achieve our goals.

At Fairfax we are strong believers in constant learning and the importance of it. We strive on development and encourage it as much as possible amongst our staff. This helps us remain the most trusted outsourced partner for payroll and provident fund services, accounting services, HR services and international payroll in Cyprus. Companies and individuals choose us because of our combined years of experience and knowledge in the industry keep our reputation as top-of-the-line service providers.

When selecting a reputable company to help your organization with payroll and HR services for example, it’s important to pin-point organisations that make it evident that they invest in their staff members. By investing in their staff members, they are indirectly also investing in the goals of their clients because the more educated the teams are, the better the outcome of the partnership hence the better the results.

At Fairfax , we invest in our staff to ensure they are up to date with all new trends in the industry and provide the correct training to build fruitful experience when offering our services to others. It is important to us to offer all our services at the highest standards which is why we are so proud of Eirini for making the decision of completing her human resources management diploma!

20% or EUR8,550 exemption

Article 8 (21) provides that the tax exemption of €8.550 and 20% (whichever is the lower) of the remuneration from any employment exercised in Cyprus by an individual who was resident outside Cyprus the tax year before the year of commencement of employment in Cyprus is exempt from income tax.

On 15^th December 2020, an amendment of the article was put in force.

The purpose of the amendment is to extend the application of the 20% tax exemption for expats working in Cyprus. The amendment of the article applies until the tax year 2030.

Prior to this extension, only those commencing employment in Cyprus from 2012 and onwards were qualified for this exemption. Individuals were able to claim the exemption for a period of 5 years up to tax year 2020.

The extension of the tax benefit now allows individuals to apply for a 5-year period given that the commencement of their employment is between 2012 and 2030.

For more information on the extension of the 20% tax benefit for expats contact Fairfax, a GRS Group Company.

Explore the benefits of engaging the Fairfax team to assist your personnel through this process by contacting them on +357 25558025 or at accounts@fairfaxyeaman.com

Fairfax is recognized for their complete outsourced payroll solution, bookkeeping and accounting services and offers a cost-effective strategy that saves companies’ time, staff and infrastructure costs. With years of experience, Fairfax have built their expertise working with leading organisations across the globe who appoint and trust them as their experienced and professional outsourced partner.

In addition to their outsourced Payroll Solutions, Fairfax will now be offering “Payroll Consultations” to those who run their payroll in-house. Payroll is known to be a task that can be time consuming if not done efficiently. Fairfax are offering a Consultation to ensure that if your payroll is carried out in house, that it is compliant with both existing and new legislations.

Each company has different needs when it comes to their payroll depending on the amount of employees they have and the complexity of the renumeration paid to their employees. Fairfax can offer a 360 appraisal of an in -house payroll process no matter what the size or complexity of the payroll.   The team at Fairfax draw on a combined expertise of over 30 years in payroll and having a background from the Top Four they are used to working with large global multinational companies as well as more traditional local companies

The Fairfax Consultations are a flexible resource and can be used on an annual or quarterly basis depending on each client requirements.

The clients of Fairfax receive confidentiality, efficiency and compliance.  Payroll requires sensitive information about personnel and in the current world with GDPR it is crucial that your payroll processes are compliant with Data Protection and GDPR.  Fines imposed for non -compliance with GDPR can run into the tens of thousands and as an EU wide legislation it is being enforced.

If you would like to speak to one of our team  to find out more about our Payroll Consultations please call Nicoletta Demetriou, Director 00357 25558025 or email Nicoletta directly Nicoletta@fairfaxyeaman.com

 

The taxation system in Cyprus is one of the more beneficial in comparison to other countries, making it an attractive destination to both companies and individuals.

As an expat living in Cyprus, you can benefit from the following exemptions:

20% or MAX of €8,550 exemption

The Tax Relief entitlement was due to expire on 31/12/2020, however according to our sources, the government is now in discussions regarding the extension of this 20% tax benefit for expats for five more years since they have seen an influx in people from abroad coming to Cyprus for employment as a result of this program. By the end of 2020, we should have an official announcement from the government on whether or not this will continue.

For someone who was not residing in Cyprus prior to taking up employment in Cyprus is exempted from tax and this would apply from January 1s from the year following the year of the beginning of employment. The lower of 20% on the annual emoluments or EUR 8,550 (whichever is lower) is the amount that is exempt for the aforementioned individuals.

This exemption can only be benefited from for a maximum of 5 years until the year 2020. It is now under review to be extended and we should have an announcement soon.

50% exemption:

When an individual’s income exceeds EUR100,000 per annum starting from the actual start date of employment and 12 months onwards and was not a tax resident in Cyprus prior to the commencement of their employment, 50% of the gross emoluments are eligible to be deducted from taxable income.

This exemption can only be benefited from for a period of 10 years from the year of employment.

It is important to emphasize that no individual is entitled to both exemptions simultaneously.

When submitting your tax returns, it is important to be able to distinguish whether or not you are considered a resident of Cyprus or not as it makes a significant difference in terms of your claims.

At Fairfax , our team of experts can access whether the benefit is applicable in your case.  To simplify the procedure, contact the Fairfax team to assist your personnel by contacting them on +357 25558025 or at accounts@fairfaxyeaman