One of the most tax-advantageous schemes in the world for technology companies that create their own intellectual property: an effective corporation tax of 3% on qualifying IP income, confirmed in writing by the Cyprus Tax Department.
The Cyprus IP Box Tax Regime is one of the most tax advantageous schemes that exist in the world offered to Cyprus technology companies which create their own intellectual property, as it allows an effective corporation tax for these companies of 3% instead of 15%. Coupled with 0% dividend tax, the IP Box Tax Regime gives a total tax of 3% — corporate and dividend tax together — to tech companies.
Companies can relocate to Cyprus or create Cyprus subsidiaries or branches which create their own intellectual property products, such as websites, mobile applications, games, plug-ins and any innovative software ideas that can be used by a 3rd party.
Cyprus companies which create their own intellectual property are entitled to a 3% corporation tax on all IP income. This tax treatment is provided by the Cyprus Income Tax Office in writing to the applicant following the successful application.
Three scenarios we are asked about most often, and how each is treated.
A Cyprus entity creates software that users buy to protect their website from viruses and hacks. The entity uses its own resources and hires independent 3rd parties for the development.
A Cyprus entity belonging to a group creates software used within the group entities to protect their websites from viruses and hacks, using its own resources and independent 3rd parties for the development.
As Example 1, but the company’s revenue comes from licensing the software and from subsequent advisory services to those corporate users — upselling, cross-selling and so on.
The Cyprus IP Box, together with the non-domicile tax regime which can be extended for up to 27 years, makes technology companies established in Cyprus among the most tax efficient European structures in the world, with a total tax of 3%.
The IP Box sets the company’s tax rate. The non-domicile regime sets yours — and the two are designed to be used together.
The current 2026 guide: the new 3% effective rate, eligibility, the application process and qualifying income.
The detailed guide to the regime, process, eligibility and taxation, noting that the effective rate became 3% from 2026.
Qualifying IP, R&D expenditure and the nexus requirement.
The IP Box regime in its wider context: IP protection, international agreements and the Cyprus IP environment.
The EU’s rising innovation hub, and what draws technology businesses to it.
Why you should protect your brand name in Cyprus and beyond — IP, trademarks and patents.
We prepare the application, explain the operations to the Tax Department and obtain the IP Box status in writing — then handle the accounting, audit and tax that follow.
Call us today: +357 22 336 309