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.
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.