Under the new regime 80% of qualifying profits granted from qualifying assets will be deemed to be tax deductible expenses. As a result the profit from IP can be taxed with an effective tax rate 2,5% or less.
The advantages are the following:
- Effective Tax rate of 2,5% or Less
- No withholding taxes on Royalties payable to non-resident, when the right is used outside Cyprus
- For rights used in Cyprus there is 10% withholding tax unless a Double Tax Treaty provides for a lower rate of the EU Interest/Royalties directive applies.
- An 80% exemption on royalty and capital gains upon disposal of IP
- Losses can be carried forward indefinitely
- Gross IP income reduced by expenses incurred for the production of IP income
- Competitive amortization provisions over a 5 year period
For further details please refer to our publications “Cyprus intellectual Property Regime”.