Cyprus · Tax regime
Intellectual Property Box Regime
Open
Last verified July 2026
Unchanged in structure, but the effective rate moved from roughly 2.5% to roughly 3% on 1 January 2026 as a mechanical consequence of the corporate rate rising from 12.5% to 15%. The 80% exemption and the OECD Modified Nexus Approach are untouched.
Still one of the lowest effective IP rates in the EU at roughly 3%, and genuinely Nexus-compliant rather than a legacy grandfathered regime. The trap is the eligibility perimeter, not the rate: trademarks and marketing intangibles were excluded years ago, so brand-heavy businesses get nothing here.
Qualifying routes
—
Qualifying patents
80% of qualifying profit exempt
—
Copyrighted software
80% of qualifying profit exempt
The facts
- Total landed cost
- No entry cost. The economic cost is the R&D substance the Nexus Approach requires you to locate in Cyprus.
- Physical presence
- Corporate — the company must be Cyprus tax resident with genuine R&D activity
- Family
- n/a — a corporate regime
- Permanent residency
- n/a
- Citizenship
- n/a
- Language test
- n/a
- Dual citizenship
- Permitted
- Requirements
- Cyprus tax resident companyqualifying intangible: patents or copyrighted software onlycompliance with the OECD Modified Nexus Approach linking benefit to Cyprus R&D spenddetailed books and records tracking qualifying expenditure per asset
What can go wrong
- Trademarks, brands and marketing-related IP do not qualify — a common and expensive misunderstanding.
- The Nexus Approach ties the benefit to R&D expenditure actually incurred by the Cyprus company; acquired IP and outsourced-to-related-party R&D dilute the qualifying fraction.
- The corporate rate rise to 15% raised the IP Box effective rate to roughly 3%; every model built on 2.5% is now wrong.
- Cyprus's 15% corporate rate exists to satisfy the OECD global minimum — but Pillar Two's own rules can claw back the benefit of an ~3% effective rate for in-scope groups. For a large multinational the IP Box may deliver far less than the headline suggests.
- Substance is audited. A Cyprus company with no engineers is not an IP Box company.