Maximize Your intellectual Profit Benefits

Unlocking Business Advantages with Cyprus IP BOX Regime

IP BOX Regime

Cyprus ranks high for ease of doing business, boasting a stable political and fiscal system with EU membership benefits. The island is an attractive location for Intellectual Property (IP) companies due to its efficient tax rate, legal protection within the EU, and supportive business environment, making it an ideal destination for IP ventures.

What is IP BOX Regime

IP Box Regime is a corporate tax regime used by many countries to incentivize research and development activities by taxing revenues deriving from licenses, royalties, patents, sale or transfer of qualified IP assets differently offering lower taxes compared to other commercial revenues.

Deduction on
qualifying profits

0 %

Effective tax rate

0 %

Years amortisation
period

Benefits of the IP Box Regime

Under the IP Box Regime, income generated from IP assets, such as patents and certain types of software, is often subject to a reduced tax rate. This can significantly lower the tax burden on revenue generated from intellectual property.

IP Box deduction: 80% of the qualifying profits arising from a qualifying asset pushing the effective tax rate to as low as 2.5%.
IP Amortisation Period: All intangible assets (excluding goodwill), irrespective of whether they are qualifying assets or not, are eligible for amortisation up to 20 years.
Competitive Advantage: The IP Box Regime boosts company’s competitiveness by retaining more IP-generated income for reinvestment, fostering growth and innovation.

IP BOX Eligibility Requirements

Qualifying Persons

Cyprus tax resident taxpayers

Qualifying Intangible Assets

A qualifying intangible asset is an asset acquired/ developed/ exploited by a person within the course of carrying out their business.

Qualifying Assets (QA) include:

Patents
Copyrighted software programs
Other intangible assets that are non-obvious, useful and novel

The following assets are specifically excluded from the IP BOX Regime:

Business names
Brands
Trademarks
Image Rights
Other Intellectual property rights used for marketing of products and services

Overall Income

The overall income includes, but is not limited, to:

Royalties
Licences
Income from the sale of the qualified intangible asset

Qualifying Expenditure

The qualifying expenditure encompasses salaries, wages, direct costs, and general expenses related to Research and Development (R&D) activities and R&D expenditures outsourced to unrelated entities.

Uplift Expenditure

The Uplift Expenditure means the lower of:

Thirty per cent (30%) of the Qualifying Expenses
The total amount of the acquisition and outsourcing cost to related parties of research activities and development, in relation to the eligible intangible asset

Overall Expenditure

Overall expenditure for the qualified intangible asset means the sum of:

The qualifying expenditure
The total acquisition costs of the explain and any R&D costs outsourced to related parties incurred in any tax year

Our Expertise

Our expertise allows us to thoroughly assess your current situation and give advice on organizing your business to benefit from a lower tax rate. Our experts handle tax compliance well and keep an eye on intellectual property calculations, making sure the right deductions are applied on time, and staying up to date with changing tax laws.