Lately, IP-Box has become one of the common taxation regimes for IT companies, which short for Intellectual Property Box, also known as the “Patent Box” and “Knowledge Development Box.” Its essence lies in reducing the effective tax rate on income derived from the use of intellectual property assets. In simple terms, the IP-Box is a preferential tax regime for companies operating in the field of innovation and investment in intellectual property. And that’s precisely why this tax regime has become so popular among tech companies.

Using the IP-Box in Cyprus allows for a reduction in corporate tax to 2.5%. To achieve this, companies need to create specific intellectual property that falls under the definition of “qualified assets.” These may include patents for inventions or software. However, it’s essential to know that trademarks, trade names, images, and other intellectual property used for marketing purposes are not considered qualified assets.

For comparison, in other countries, the IP-Box rate is significantly higher. For instance, in the Netherlands it is 7%, and in Belgium it’s even 15.8%. That’s why several thousand IT companies have already successfully relocated to Cyprus and are benefiting from the tax incentives provided by the government.

✅ If you want to obtain more detailed information about relocating a company or opening a business in Cyprus and taking advantage of favorable tax conditions, feel free to contact Replace for a free consultation. We will provide you with comprehensive and qualified support for all your inquiries.