4 November 2016 – Cyprus seemingly closed
its Intellectual Property Box last month in order to fully comply
from now on with the relevant OECD recommendations relating to BEPS
Action 5. Things though may not be what they seem.
The Cyprus Parliament voted on 14 October 2016 a number of
amendments to the Cyprus IP Box and the relevant regulations have
been scheduled to become effective within 30 days, unless
amended.
The amendments do not materially affect the existing tax IP
regime, which will be valid until the 30th of June 2021, nor do
they alter the current effective tax rate of 2,5%. They actually
introduce a new IP regime, which is based on the Modified Nexus
Approach (see p.3) in calculating the amount of profits which will
be subject to the 80% exemption.
