Does an IP filing automatically lead to 3%?

No. We review the IP, carry out the filing and assemble the required documents so that qualifying IP income can be treated cleanly at 3% corporate tax under the IP Box. Whether the conditions are met is always a matter for the individual review.

When is 3% corporate tax achievable?

Where IP income fully qualifies, effective corporate tax can be 3%. We review the classification before implementation on the basis of the asset, substance, R&D expenditure and documentation.

How does a blended rate arise?

Where qualifying IP income meets other taxable income, the overall effective burden can sit between 3% and 15%. We allocate qualifying profits cleanly and document the calculation.

Who is the IP Box suitable for?

In principle, companies with qualifying intangible assets, such as copyright-protected software or patents. We review how IP and the business model can be moved into a suitable structure.

Do you also review existing IP?

Yes. We analyse existing assets, income and the suitable structure, and assess whether and how the IP Box may come into play.

How do OECD and EU rules fit in?

CyStarter supports full documentation and implementation in line with OECD and EU rules: from the suitability review through profit allocation to ongoing corporate-tax compliance.

Tax & IP

IP Box & tax structuring

We review and structure whether your existing or planned IP income may fall within the Cyprus IP Box: from the tax suitability review through profit allocation to ongoing documentation.

3% corporate tax on qualifying IP profits*

What is the effective tax rate in the Cyprus IP Box?

Where relief applies in full, effective corporate tax on qualifying IP profits can be 3%: 80% of the qualifying profit is notionally deducted, and the remaining 20% is taxed at the 15% standard rate. 15% × 20% = 3%. The widely quoted 2.5% figure comes from the former 12.5% standard rate and no longer applies after the increase to 15%. Whether the conditions are met is always an individual question.*

Effective Cyprus IP Box burden by standard corporate tax rate (schematic, not a case-specific promise).
Standard rate	Base after 80% deduction	Effective burden	Applies
12.5%	20% of qualifying profit	2.5%	until the standard rate was raised
15%	20% of qualifying profit	3.0%	current standard rate as used on this site in 2026

A worked example

On €100 of fully qualifying IP profit, €20 is taxable. 15% of €20 is €3 of corporate tax. The effective burden on the full €100 profit is therefore 3%. Where qualifying IP income is mixed with other taxable income, the overall effective rate can sit between 3% and 15%. An interactive version is on the IP Box calculator.

What matters?

What counts in particular is the type of asset, the economic allocation of the IP, development and R&D expenditure, profit allocation and proper documentation. We review these conditions before any recommendation.

Which IP can be relevant?

Depending on the business model, copyright-protected software, AI tools, applications, technical processes, patents, utility models and other protected intangible assets may come into play. We review how your IP and the income derived from it can sit in a suitable tax structure.

What we do

Our scope of work

Review of business model, IP, income and country nexus.
Tax suitability review and documentation concept at asset level.
Structuring of IP ownership, licensing model and corporate-tax process.
Review and filing of a binding assessment and IP certificate, including the required documents.
Coordination with tax advisers on calculation and ongoing tax compliance.
Review of whether a pre-filing or ruling may be useful in the individual case.

Your benefit

You receive a well-founded view of whether and how qualifying IP income can be treated at 3% corporate tax under the IP Box, including clean documentation. Capital gains on the disposal of qualifying intangible assets are also fully tax-exempt.

*The 3% rate applies where the IP Box fully applies to qualifying IP profits. The standard rate is 15%; with mixed income the effective burden sits between 3% and 15%, depending on the structure. Suitability and the concrete tax effect depend on the circumstances of the individual case; no outcome is guaranteed.

Last updated: 14 August 2026

Why Cyprus as a location Schematic IP Box calculator

RelatedBuild software IP

Process

How we work together

01
Analyse business model, assets and income
we classify IP, revenue and country nexus.
02
Design tax suitability and profit allocation
which income can qualify, and how is it separated cleanly?
03
Structure IP ownership, licensing model and documents
chain of title, contracts and evidence at asset level.
04
Support filing, assessment and tax implementation
documents, IP certificate and coordination with tax advisers.
05
Continue calculation and ongoing compliance
annual allocation, documentation and adjustments when things change.

FAQ

Frequently asked questions

Further services

IP development & software assets

Conception and development of protected, usable and licensable intangible assets, with a focus on custom software.

Know-how becomes a licensable asset

Learn more

Incorporation & director model

End-to-end support in setting up a Cyprus Ltd: with a local director, clear governance processes and a clean register structure.

Fixed-fee model for ongoing management

Learn more

Next step

Talk through your Cyprus structure.

Tell us about your plans. We will review suitability, structure and next steps in a no-obligation initial consultation.

Request an initial consultation