Beckham Law vs Cyprus's 50% exemption for new residents: 2026 comparison
Javier López Founder · holds the Beckham regime · not a lawyer
Verified as of 14 September 2026. Every fact below comes from a large advisory firm’s page dated 2025 or 2026, or from Spanish legislation. Cyprus’s own tax department pages could not be used for every point, so the Cypriot side should be confirmed locally. These rules change; check the source before relying on a figure. For the rest of Europe, see our 2026 comparison of European expat regimes.
This article is general information, not tax advice.
Two exemptions, for different newcomers
Cyprus does not have a special flat rate for people who move in to work. It has exemptions on employment income in its income tax law, and which one you get depends mainly on your salary.
The 50% exemption
- What it does: 50% of the pay from employment carried out in Cyprus is exempt from income tax.
- Threshold: it applies only to pay above €55,000 a year.
- Duration: up to 17 years from the year the employment starts.
- Who qualifies: people whose first employment in Cyprus started on or after 1 January 2022, and who were not Cyprus tax resident for at least 15 consecutive tax years before. People who started work before 2022 may qualify under transition rules.
The 20% exemption
- What it does: 20% of employment income is exempt, up to €8,550 a year.
- Who: only people who do not qualify for the 50% exemption, with a first employment in Cyprus starting after July 2022, according to PwC.
- Duration: 7 years, starting the tax year after employment begins.
- Prior conditions: the two advisory firms we checked describe them differently. KPMG refers to having been employed outside Cyprus by a non-resident employer for at least three consecutive years; PwC to not having been Cyprus resident for three consecutive years, plus employment abroad. Confirm which applies with a Cypriot adviser.
A third exemption, of 25%, exists for returning Cypriot residents; it is not a new-resident regime.
The 2026 tax reform
Cyprus’s tax reform took effect on 1 January 2026 and set new income tax bands: 0% up to €22,000, 20% from €22,000 to €32,000, 25% from €32,000 to €42,000, 30% from €42,000 to €72,000 and 35% above €72,000, according to Grant Thornton Cyprus. KPMG’s guide of April 2026, written after the reform, still describes the 50% and 20% exemptions with the same thresholds and durations.
Cyprus and Spain side by side
| Spain (Beckham Law) | Cyprus (50% exemption) | |
|---|---|---|
| How it works | Flat 24% on employment income up to €600,000, 47% above | 50% of employment pay exempt; the rest on the ordinary scale |
| Salary threshold | None | Pay above €55,000 a year |
| Duration | Year of residence plus the next 5 | Up to 17 years |
| Prior non-residence | 5 tax years | 15 consecutive tax years |
| Who | Any employee, including remote workers for a foreign employer; directors; ENISA entrepreneurs; qualified professionals for start-ups | First employment in Cyprus from 2022, pay carried out in Cyprus |
| Below the threshold | The regime still applies, though it may not pay off | A smaller 20% exemption, capped at €8,550, for 7 years |
Where each one tends to fit
Cyprus rewards a long stay on a salary above €55,000: 17 years is the longest window among the European regimes we compare. Its 15-year non-residence condition is also the strictest, and the exemption covers pay for work carried out in Cyprus.
Spain has no salary threshold, covers remote employees of foreign companies and applies one rate to all employment income, but for six tax years, with no personal or family allowances and a six-month deadline to opt in.
Whether half a salary taxed on the Cypriot scale costs less than a flat 24% depends on the salary and on the rest of your income. Calculate both returns with your figures before deciding.
What to check before deciding
- Whether your salary will stay above €55,000 in the years you plan to be there.
- Your residence history: 15 consecutive years outside Cyprus for the 50% exemption.
- Where the work is carried out, and your other income.
- On the Spanish side: your route, the five-year rule and your Modelo 149 deadline. The free diagnosis checks them in five minutes, and the savings calculator shows what the Beckham Law means on your salary.
Have the Cypriot side confirmed by an adviser in Cyprus. If you want the Spanish side modelled by a registered lawyer or tax advisor, you can ask for a review: we will look for one, with a fixed quote before you commit to anything.
Sources
Frequently asked questions
How does Cyprus's 50% exemption work?
Half of the pay from employment carried out in Cyprus is exempt from income tax, if the pay is above €55,000 a year. The other half is taxed on the ordinary Cypriot scale. It lasts up to 17 years and is for people whose first employment in Cyprus started on or after 1 January 2022 and who were not Cyprus tax resident for at least 15 consecutive years before.
Is there anything for newcomers earning less than €55,000?
There is a 20% exemption on employment income, capped at €8,550 a year, for up to seven years, for people who do not qualify for the 50% exemption. Advisory firms describe its prior conditions slightly differently, so confirm them with a Cypriot adviser.
Did the 2026 Cyprus tax reform change these exemptions?
The reform, in force since 1 January 2026, changed the income tax bands. A KPMG guide published after the reform, in April 2026, still describes both exemptions with the same thresholds and durations.
How does it compare with the Beckham Law?
Cyprus exempts half of a salary above €55,000 for up to 17 years and taxes the rest progressively. Spain taxes all employment income at a flat 24% up to €600,000 for six tax years, with no salary threshold and remote work for foreign employers covered. Which costs less depends on the salary and both returns.
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