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Cyprus Tax Reform Delivers Immediate Fiscal Benefits for Taxpayers

Overview Of The Reform

On January 1, 2026, Cyprus implemented a comprehensive tax reform designed to streamline tax collection and deliver direct financial benefits to taxpayers. Revised tax scales are set to offer significant income tax relief, as confirmed by the audit office.

Automatic Adjustments And Payroll Integration

The reform’s measures will be automatically applied via income tax withholding, starting with the January 2026 payroll. This integration affects state officials, employees, pensioners, and hourly government personnel, ensuring prompt benefits across the board.

Obligations For Higher-Income Taxpayers

Individuals earning more than €22,000 annually must take additional steps to capitalize on the full range of new deductions, exemptions, and tax reliefs. A detailed explanatory tax guide, inclusive of frequently asked questions and practical examples, is available from the Tax Department. A corresponding declaration form must be submitted to confirm eligibility for all offered benefits.

Specific Submission Guidelines

The reform delineates clear submission processes for various taxpayer groups:

  • Active State Officials And Employees: The necessary declaration, prepared by the payroll sector of the general accounting office, should be submitted electronically. For further details, consult the Ministry of Finance website or the general accounting office.
  • Retired Officials and Employees: Eligible individuals must complete form T.F.59 and submit it to the designated email address provided by the Tax Department.
  • Hourly Government Personnel: A dedicated declaration form, prepared by the General Accounting Office, must be completed and submitted as instructed.

Processing And Implementation Timeline

Data entry into the relevant electronic systems is scheduled to begin in February 2026, with processing handled in order of priority. Any adjustments to income tax withholding will be applied over the remaining months of the year, calibrated according to each individual’s annual taxable income.

Conclusion

For additional information or clarification, stakeholders are advised to contact the Tax Department directly. This reform underscores Cyprus’s commitment to modernizing its fiscal policy while offering transparent, immediate relief to taxpayers.

Societe Generale Bank Cyprus Introduces Four-Day Workweek Under New Labour Agreement

The Societe Generale Bank – Cyprus has introduced a four-day workweek for employees during July and August under a renewed collective agreement with the banking union ETYK.

Setting A New Standard For Banking Institutions

Societe Generale Bank Cyprus employs around 100 staff members. The new agreement introduces a reduced working schedule during the summer months as part of the collective contract for 2023–2027.

ETYK supported the introduction of the four-day schedule during negotiations for the agreement. Other financial institutions, including Bank of Cyprus, Eurobank Ltd, Alpha Bank, National Bank of Greece (Cyprus), the Housing Finance Organization, the Bankers Association representing personnel, KEIDIPES and several insurance subsidiaries, signed separate agreements with ETYK that do not include a four-day workweek.

Key Provisions And Broader Implications

The collective agreement introduces a four-day workweek during July and August. Employees will work their regular daily hours across four days on a rotational basis while banking services continue throughout the week.

Additional provisions in the agreement include several benefits for employees. Staff will receive a one-time bonus of €1,500 upon signing the contract, a three-day increase in annual leave, adjustments to salary scales and higher contractual loan limits.

Comparative Analysis With Industry Peers

The agreement differs from arrangements negotiated between ETYK and the Banking Employers Association. Under those agreements, employees received an additional six days of annual leave. The Societe Generale Bank Cyprus agreement provides a three-day increase, bringing total annual leave to 36 days, excluding public holidays.

The bonus structure also differs. Agreements with the Banking Employers Association include a total bonus of €4,500 paid in three installments in 2025, 2026 and 2027. Societe Generale employees receive a single payment of €1,500.

Looking Forward

ETYK said the introduction of a four-day workweek during the summer months reflects discussions about working conditions in the banking sector. The arrangement may contribute to broader discussions about work schedules and employee benefits within the financial industry in Cyprus.

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