Quick Answer
The Cyprus IP Box gives an effective corporate tax rate of 3% on qualifying IP profits. Companies deduct 80% of qualifying income before applying the standard 15% corporate rate. The regime uses the OECD modified nexus approach - the deduction scales with the ratio of qualifying R&D expenditure to total R&D. Qualifying assets include patents and software copyrights developed through company R&D activity.
Cyprus IP Box Calculator 2026 [Free]
The Cyprus IP Box (Intellectual Property Box) regime, governed by Article 9B of the Income Tax Law, allows companies to deduct 80% of qualifying IP profits from taxable income. With a standard corporate rate of 15%, this results in an effective rate of 3% on qualifying income. The regime uses the OECD-compliant modified nexus approach, meaning the deduction scales with the proportion of qualifying R&D expenditure versus total R&D expenditure (the nexus ratio). Qualifying IP includes patents, software copyrights, and certain other intangible assets with patent or equivalent protection.
Free, no commitment
Moving to Cyprus or opening a company?
Tell us your situation and we'll connect you with our specialist expat advisory in Cyprus: Non-Dom tax, company setup and residency, done for you. Free consultation, no commitment.
What qualifies for the Cyprus IP Box?
Qualifying assets include patents, utility models, software copyrights, and other IP protected by law. Trademarks and marketing-related IP do not qualify. The IP must be developed (at least partly) through R&D activity by the company.
What is the nexus ratio?
The nexus ratio determines what proportion of IP profits qualify for the 80% deduction. It is calculated as (qualifying R&D expenditure / total R&D expenditure) multiplied by 125%, capped at 100%. Companies that outsource R&D to related parties have a lower nexus ratio.
How does Cyprus IP Box compare to other countries?
Cyprus IP Box gives an effective rate of 3% (15% multiplied by 20%). This compares to Luxembourg (5.2%), Ireland (6.25%), Netherlands (9%), and UK (10%). Cyprus is one of the most competitive IP Box regimes in the EU.
Do I need an advance tax ruling for the Cyprus IP Box?
An advance ruling is not mandatory but is strongly recommended to confirm the qualifying status of the IP and the nexus ratio. The Cyprus Tax Department issues rulings, typically within 2-4 months.
Can non-Cyprus companies use the Cyprus IP Box?
The IP Box applies to Cyprus tax-resident companies. Foreign companies can access it by holding the IP through a Cyprus subsidiary, subject to substance requirements and the nexus approach.
Free, no commitment
Moving to Cyprus or opening a company?
Tell us your situation and we'll connect you with our specialist expat advisory in Cyprus: Non-Dom tax, company setup and residency, done for you. Free consultation, no commitment.