Insider Business BoC VRS appeal depends on whether compensation is taxable or not

BoC VRS appeal depends on whether compensation is taxable or not

The imminent Bank of Cyprus voluntary retirement scheme’s appeal to employees all depends on whether the one-off lump-sum compensation will be taxable or not, according to insiders.

Both the lender as well as the Tax Department keep cards close to their chest, even though talks have taken place and letters were exchanged on this crucial issue, one also said.

Tax Department head Yiannis Tsangaris is believed to have given the green light for compensation not to be taxed but nothing is absolutely certain. The scheme is to be presented to staff today.

In December 2017, the Department drafted legislation providing that the practice of non-taxed compensation the public and wider public sector was enjoying to come to an end. The draft bill also included the banking sector.

But the proposal was put aside because of the imminent February 2018 presidential elections at the time. And it is still in the parliament’s drawer. The scheme is the fourth exit scheme prepared by the bank since the financial crisis of 2013 and its subsequent bail-in by depositors.

The one-off compensation package to be offered to a total of 4,155 employees will not exceed €200,000 and will be calculated based on employees’ earnings and years of service, while their age will also be a factor.

The bank’s latest early retirement plan is expected to be along the lines of the previous one deployed in May 2016, when 450 employees had pressed the ‘exit button’.

If the scheme process goes smoothly and if the Helix project also goes according to plan which also provides that the 108 bank employees working on the non-performing loan package’s transaction are transferred to the buyer, then these two imminent moves will cut down staff by almost 500.

BoC’s aim is to have about 3,650 employees in 2020 so as to rationalise its cost base.


Read more:



Top Stories

Foreign experts for the cataract patients

The police may call foreign experts in relation to the serious incident with the eight people who were operated for cataract and then had...

Metropolitan of Paphos in self-isolation

Metropolitan of Paphos Georgios is in self-isolation due to the fact that he has been in contact with a COVID-19 confirmed case. The Metropolitan...

13th month salary not certain in private sector

Due to the COVID-19 pandemic many companies in the private sector are unable to pay 13th month salary to their employees who are contacting...

Fewer Cypriots now going abroad to work

Fewer Cypriots now go overseas for work while the domestic market is flooded with more and more migrants seeking a job and a better...

Health Minister says General Healthcare System upgraded with new services

Cyprus' Minister of Health Constantinos Ioannou has pointed out that yet another significant step has been taken to enrich and upgrade the healthcare services,...


Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...


No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...