Intellectual Property Co.

Example:

COST OF ACQUISITION 50
Revenue 100
Direct Expenses 30
Description EUR
Revenue 100
Direct Expenses -30
Capital Allowances 50 x 20% -10
Profit 60
80% exemption (60 x 80%) -48
Taxable Profit 12
Corporation Tax at 12.5% 1,5 No tax on dividend distribution to foreign investor

(b) No tax on dividend distribution to foreign investor 

 

 

Taxation in Cyprus:

1.     The Cyprus Company owns the Intellectual Property and licenses the rights to the foreign entity

2.     There is an 80% exemption on the net profit from the exploitation of the intellectual property. The net profit is calculated after deducting from the income all directly attributable expenses and 20% capital allowances on the cost of acquisition

3.     The 80% exemption also applies on the net profit on disposal of intellectual property

4.     No withholding tax on dividend distribution to foreign investor