IP BOX Regime
The IP Box regime in Cyprus allows companies to claim a reduced corporate tax rate on income derived from certain qualifying intellectual property (IP) rights.
The specific reduced tax rate under the IP Box regime is 80% of the standard corporate tax rate of 12.5% which means the rate is 10%. This can result in significant tax savings for companies that are able to qualify for the regime.
Patents: An invention that is new, involves an inventive step, and is capable of industrial application.
Trademarks: A sign that is capable of distinguishing the goods or services of one undertaking from those of other undertakings.
Designs: The appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colors, shape, texture or materials of the product itself or its ornamentation.
Copyright: The rights granted to authors of literary, dramatic, musical and artistic works, sound recordings, films, broadcasts and cable programmes.
It's important to note that not all IP rights will qualify for the IP Box regime. The rights have to be developed, acquired or registered in Cyprus by the company claiming the benefit and they have to be used for commercial purpose.
The company also has to demonstrate that it has incurred qualifying expenditure on the development, acquisition or registration of the IP rights.