Cyprus provides an Intellectual Property (IP) tax regime aligned with the OECD’s nexus approach. It offers generous tax incentives for companies involved in the development or exploitation of IP, making Cyprus a competitive jurisdiction for IP structuring.
Under the Cyprus IP Box regime, 80% of the qualifying profits from eligible IP assets are exempt from corporate income tax. This leads to an effective tax rate as low as 2.5%.
Qualifying assets include patents, copyrighted software, and other IP developed through R&D activities carried out by the taxpayer. Marketing-related intangibles are excluded.
The regime is based on the 'nexus' principle, which links the tax benefit to the extent of R&D carried out by the taxpayer. Proper documentation and cost-tracking are essential.
Gains arising from the disposal of qualifying IP assets can also benefit from significant tax exemptions.
Exectus can help assess your IP portfolio, ensure proper structuring and cost tracking, and support your tax filings under the Cyprus IP regime.
