Changes To IP Box Scheme Proposed

Corporate Tax, Cyprus

• Introduction
• Transitional arrangements
• New arrangements
• Comment

Introduction

Parliament recently amended the Income Tax Law to bring its provisions on the taxation of income from the use or sale of intangible assets into line with the 'modified nexus' approach.

This approach was agreed by G20 leaders towards the end of 2014 and adopted by the Organisation for Economic Cooperation and Development and the European Union. It allows a taxpayer to benefit from an IP taxation regime (commonly known as an 'IP box') to the extent that it can show material relevant activity, including a clear connection between the rights which create the IP income and the activity which contributes to that income.