Cyprus IP Box Process Explained (3% Total Tax For Technology Companies) (Video)

Transfer pricing often first appears to be an accounting question. The legal position matters just as much. A payment between companies in the same group may be recorded correctly in the accounts and still need to be tested against the terms independent parties would have agreed.

They are trying to tax the provident funds, the hedge funds and the pension funds. This is something we are against.

A new Chainalysis report reveals that over $457 billion in potentially taxable cryptocurrency activity occurred globally in 2025, with significant implications for crypto holders and traders in Cyprus. While frameworks like OECD's CARF and EU's DAC8 extend reporting requirements to crypto-asset service providers, substantial portions of DeFi, peer-to-peer transfers, and private wallet holdings remain outside their scope, creating critical compliance gaps that blockchain analytics must fill.

Cyprus's 2026 tax reform introduces a 10% charge on disguised dividends, targeting previously informal arrangements where shareholders use company assets for private purposes. The charge applies to the full market value of assets like company cars and properties, creating significant tax exposure for owner-managed businesses that were previously operating under unreported arrangements.

Cyprus has fundamentally altered its corporate tax residence rules, effective January 2026, creating automatic tax residency for all Cyprus-incorporated companies unless a double tax treaty explicitly provides otherwise.

The Council of Ministers has issued Orders introducing significant changes to the VAT treatment of immovable property, with effect from 1 September 2026. The amendments to the Fifth and Eighth Schedules of the VAT Law will change the way the VAT treatment of buildings is determined and introduce corresponding changes to the rules concerning the reduced VAT rate applicable to certain renovation and repair works.

Cyprus has cut its dividend tax rate from 17% to 5% starting January 2026, but the reduction applies only to profits earned from that date forward.

Cyprus has introduced an 8% tax rate on qualifying crypto-asset disposal gains while implementing full MiCA authorisation requirements following the end of the transitional period on 1 July 2026.

The governments of the Hong Kong Special Administrative Region (HKSAR) and the Republic of Cyprus announced the signing of a comprehensive double taxation agreement (DTA) on 12 June aimed at eliminating double taxation on income and combating tax evasion and tax avoidance.

Even at the F1 Grand Prix, smart founders talk tax. With the Cyprus IP Box regime, tech companies, app developers and IP owners pay an effective tax rate of just 3% on qualifying IP income — an 80% exemption that survived the 2026 tax reform (standard corporate tax is now 15%). Combine it with non-dom status and 0% tax on dividends, and Cyprus puts your business in pole position. Our team handles the structuring, IP Box application and all filings from A to Z.