IP Box in Cyprus

The Cyprus IP Box lets companies with qualifying intellectual property, such as software and patents, pay tax on a reduced part of the profit from it. We check whether your IP and income qualify.

ForSoftware, patents
Based onNexus approach
Assessment2–4 weeks
Check my case for freeSee the steps
Limassol seafront towers and marina on a sunny morningChecked 28 October 2026

Steps and timeline

  1. 1

    Check the IP

    Patents, computer software and some other legally protected IP can qualify. Trademarks, brand names and image rights cannot.

    1 week
  2. 2

    Calculate the share

    Qualifying profit = IP income after direct costs × (qualifying R&D spend + uplift) ÷ total spend on the IP.

    1–2 weeks
  3. 3

    Set up records

    Track R&D costs for each asset or product: salaries, direct costs, unrelated contractors, group companies and purchase cost.

    before year end
  4. 4

    Apply in returns

    The company claims the 80% deduction in its corporate tax return. It may claim less, or none, for a year.

    yearly

Documents

For your tax adviser

0 of 4 ready

Official form: Ε.Σ.02 (E.S.02) · how to fill it in

The exact list depends on your situation; we confirm it before filing.

Who does what

What you do

  • Share your situation and goals
  • Collect documents from home
  • Agree the scope of work in writing

What we do

  • Check the requirements for your case
  • Prepare the documents and file the application
  • Follow up until the decision

Your coordinator

  • Plans the work and next steps
  • Keeps one timeline for everything
  • Reminds you of renewals and deadlines

Common mistakes

  • Claiming the IP Box on a trademark or brand: marketing IP does not qualify
  • Not tracking R&D costs for each asset from the start, so the share cannot be proven later
  • Treating development by a group company as qualifying: it counts only through the 30% uplift
  • Counting all company income as IP income: only income from the qualifying asset, after direct costs, counts
  • Forgetting that only 20% of a loss on qualifying IP can be used

What affects the cost

The price depends on your situation. We explain the scope and expected costs before work begins.

Number of IP assets and productsQuality of your R&D cost recordsGroup development or bought-in IPTransfer pricing documentation also needed

Questions

Does SaaS qualify?

Often yes. Computer software is a qualifying asset under the 2016 regulations. So SaaS income can qualify when the company owns the software and paid for its development itself or through unrelated contractors. Work bought from group companies, and the cost of buying the software, lower the qualifying share. Marketing IP, such as the brand or trademark, never qualifies.

How much tax does the IP Box save?

Take a company that developed its software in-house and earns €100,000 of qualifying profit in 2026. The IP Box deducts 80%, or €80,000, so only €20,000 is taxed at the corporate rate of 15%. Tax is €3,000 instead of €15,000: an effective rate of 3%.

What if a group company did part of the development?

The qualifying share falls. Example: €300,000 spent on own developers and €100,000 on a group company. The uplift is the lower of 30% of €300,000 (€90,000) and €100,000, so the share is (€300,000 + €90,000) ÷ €400,000 = 97.5%. On €200,000 of IP income, €195,000 qualifies, the deduction is €156,000 and €44,000 is taxed: €6,600 of tax.

Can I use a loss on IP?

Only partly. When the qualifying profit is a loss, only 20% of it counts. That part can be set off against other income or carried forward (Income Tax Law, section 9(1)(k)).

Sources

Figures checked 28 October 2026. Rules change: we confirm them for your case before you act.

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A coordinator replies within one working day with the next steps.

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