Are Permanent Residence holders obligated to pay Cyprus tax on their international income?

No, unless they spend more than 183 days in Cyprus in a year. There are significant tax advantages for foreigners who become Cyprus tax residents.

What is the procedure for a Permanent Residency holder to apply for Citizenship based on the years of stay?

The Investor must have completed 7 years of legal residence in Cyprus prior to the date of application and to have resided legally and continuously in Cyprus during the 12 months preceding the date of the application.

Who are considered to be financially dependent adult children?

Unmarried children aged between 18 and 25, who may prove that they are university students for at least 6 months after the application date.

What if you need 'Life-time' Permanent Residency for dependents?

Children who are financially dependent and meet the criteria can be included in the Permanent Residency application, granting them life-long validity without the need for renewal.

Maximize Your Intellectual Property Income

Unlocking Business Advantages with Cyprus IP BOX Regime

Cyprus IP BOX Regime

Cyprus consistently ranks among the top EU jurisdictions for ease of doing business, offering a stable political and fiscal framework alongside full EU membership benefits. Its favorable tax environment, robust legal protections, and business-friendly infrastructure make it an ideal location for companies managing Intellectual Property (IP) assets.

For businesses looking to reduce their effective tax rate on IP income, Cyprus IP Box Regime stands out as a strategic and attractive destination.

What is IP BOX Regime

The Cyprus IP Box Regime is a preferential corporate tax framework designed to promote innovation by offering reduced tax rates on income derived from qualifying intellectual property.

This regime covers revenues from:

Patents and patent applications
Copyrights and related rights
Licenses and licensing agreements
Royalties from IP assets
Sale or transfer of eligible IP assets

Widely adopted across Europe, the Cyprus IP Box Regime incentivizes R&D activities by enabling businesses to benefit from significantly lower tax rates compared to standard corporate income.

Deduction on
qualifying profits

0 %

Effective tax rate

0 %

Years amortisation
period

Benefits of the IP Box Regime

The Cyprus IP Box Regime offers one of Europe’s most competitive intellectual property tax frameworks. Income generated from qualifying IP assets — including patents, copyrighted software, and other innovative creations — may benefit from significantly reduced tax rates, helping businesses retain more of their IP-related profits.

IP Box deduction: Up to 80% of the qualifying net income from eligible IP assets can be deducted, effectively reducing the corporate tax rate on such income to as low as 2.5% — one of the lowest in the EU.
Extended Amortisation Period: All intangible assets (excluding goodwill), whether qualifying or not, can be amortized over a period of up to 20 years, allowing for long-term financial planning and cost distribution.
Competitive Advantage: By minimizing the tax burden on IP income, companies can reinvest more capital into research, development, and innovation — strengthening their market position and accelerating global growth.

IP Box Regime: Eligibility Criteria

Who Can Apply

Only Cyprus tax resident companies or individuals are eligible to take advantage of the IP Box incentives. The taxpayer must be actively involved in the development, management, or exploitation of the intellectual property asset.

Qualifying Intangible Assets

A qualifying intangible asset is one that has been acquired, developed, or used by a Cyprus tax resident as part of their ordinary business activities.

Eligible IP assets include:

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

Certain intangible assets are specifically excluded from the Cyprus IP Box Regime. These include:

Business names
Brands
Trademarks
Image Rights
Other IP rights used mainly for marketing or promotion

Overall Income

Under the Cyprus IP Box Regime, the overall income generated from qualifying intangible assets may include, but is not limited to:

Royalties from the commercial use of IP rights
Licences granted to third parties for the exploitation of the intellectual property
Revenue from the sale or disposal of a 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:

30% of the qualifying expenses directly associated with the development of the IP
Total acquisition and outsourcing costs paid to related parties for R&D and other qualifying activities, as they pertain to the intangible asset

Overall Expenditure

For a qualifying intangible asset, overall expenditure includes:

The total qualifying expenditure as previously defined
The costs of acquisition and outsourced R&D to related entities incurred in any given tax year

Our Expertise

At DPCA, our deep expertise in the Cyprus IP Box Regime allows us to thoroughly assess your current business structure and provide tailored guidance on how to benefit from significant tax reductions.

We help you strategically organise your intellectual property assets, ensuring you meet all compliance requirements while maximising available deductions. Our team stays up to date with evolving tax legislation and handles complex IP-related tax calculations with precision—making sure no opportunity for savings is missed.

Let us help you unlock the full potential of your IP income through smart, compliant structuring.

FAQs

What is the Cyprus IP Box Regime?

It’s a tax incentive offering reduced rates—down to 2.5%—on income from qualifying intellectual property for Cyprus tax residents.

Who is eligible to apply?

Cyprus tax resident companies or individuals involved in developing or exploiting qualifying IP assets.

What IP assets qualify?

Patents, copyrighted software, and other non-obvious, useful, and novel assets. Trademarks and brands are excluded.

What is the effective tax rate under the Cyprus IP Box Regime?

Thanks to an 80% exemption on qualifying profits, the effective tax rate under the IP Box Regime can be as low as 2.5%—one of the most competitive rates in the EU.

Is the Cyprus IP Box Regime aligned with international standards?

Yes. The Cyprus IP Box Regime complies fully with the OECD’s BEPS (Base Erosion and Profit Shifting) Action Plan and the EU Code of Conduct, ensuring transparency and long-term sustainability for international businesses.

How can DPCA help me benefit from the IP Box Regime?

Our team of experts can help you evaluate eligibility, organise your IP structure, manage compliance, and optimise tax deductions. We’ll guide you through every step to ensure you unlock the full benefits legally and efficiently.