The implementation of the so called IP Box has effectively established Cyprus as one of the most attractive regimes when it comes to the safeguarding and tax optimisation of the rights stemming from the ownership of Intellectual Property.
The features of the IP Box – legislation enacted to provide incentives and tax exemptions for the stimulation of innovation and development – include the below:
- 80% of the net income resulting from the exploitation of Intellectual Property rights is fully exempt from taxation and the remaining 20% is taxed at 12,5%.
- 80% of the profits resulting from the sale of Intellectual Property rights is fully exempt from taxation and the remaining 20% is taxed at 12,5%.
- any expenditure of a capital nature for the acquisition or development of IP is claimed as a tax deduction in the year in which it was incurred and the immediate four following years on a straight-line basis
- dividend income generated by royalty income earned by a Cyprus controlled company and paid out to beneficial owners who are not Cyprus tax residents is fully exempt from taxation
Furthermore, the wide network of double tax treaties ratified by Cyprus offers a uniquely advantageous opportunity for structuring the efficient exploitation of Intellectual Property rights through the utilisation of vehicles such as the Cyprus company and the Cyprus International Trust.
Cyprus is a member of the World Intellectual Property Organization and has ratified among others the Paris Convention, the Berne Convention, the Madrid Agreement & Protocol, the Patent Cooperation Treaty and the European Patent Convention, and due to its advantageous geographical position serves Europe, the Middle East, Asia and Africa as a regional business hub.
Yiannis Papazacharia L.L.C. advises on and deals with all aspects of the protection of Intellectual Property, including registration of local, community and international trademarks, protection of trademarks, copyrights, patents and in general IP rights both on a local and international level, infringement of IP rights and registration of domains.