Intellectual Property Rights

In May 2012, Cyprus has introduced an intellectual property rights tax regime for companies whose one of their main activities is intellectual property. The intellectual property rights tax regime is effective from 1 January 2012.

The basic provisions are as follows:

This means that the effective tax rate for intellectual property rights derived profit is 2.5%, as only 20% of the profits will be subject to the normal corporate tax of 12.5%.

In an effort to fully align the existing IP regime with the parameters of the relevant OECD recommendations of the BEPS Action 5, on 14th October 2016 amendments to the current Cyprus Intellectual Property (IP) regime have been adopted, with effect from 1 July 2016.

The amendments do not change the effective tax rate of 2.5% as currently imposed under the current IP regime. Among the measures under the revisions to the IP tax regime are:

The above should be used as a source of general information only. It is not intended to give a definitive statement of the Law and is subject to the Disclaimer.

For further details on these issues, please do not hesitate to contact us.