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Abolition of income taxation on the gratuity of employees with a contract in the Public Service

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Kαταργηση φορ&omicron ;λoγησης εισοδorματος στο φιλοδo&rho ;ημα υπαλλorλων με σyμβαση στη Δη&mu ;oσια Υπηρεσiα

With a bill voted in the afternoon by the Plenary Assembly, the taxation of the income on the gratuity received by the employees who are employed under contract in the government service and in the wider public sector.

At the same time, the reference to permanent employees is removed from the interpretation of the term “employee who is employed under a contract and receives a tip”, as this category of employees has been included in the scope of application of other legislation that provides for their pension benefits.

< p data-block-key="al63u">The motion passed with 30 votes in favor.

It is recalled that with a law passed in 2022, a new occupational pension benefits plan was created for employees of the state service and the wider public sector, while any tip or lump sum paid pursuant to its provisions is exempt from income tax.

Also based on the provisions of the Retirement Benefits of State Employees and Employees of the Greater Public Sector including the Principles of Local Self-Government (Provisions of General Application) Law, it has been repealed, with retroactive effect from 1 January 2021, the taxation of the lump sum for members of the government pension scheme, as well as for members of similar public sector pension schemes.

Thus, it was deemed necessary to repeal the measure regarding the imposition of income tax on the gratuity received by persons employed under contract in the government service and in the wider public sector, for relevance purposes with the applicable legislation and equal treatment of employees.

Source: KYPE

Source: reporter.com.cy

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