Cyprus IP Company: The Breathless Conundrum Solved

The breathless conundrum for IP companies is four-fold: not only should royalties be taxed at a low rate in order to maximise profits; but also research and development (R&D) or acquisition costs should be considered as allowable expenses to the maximum possible effect, whilst also the jurisdiction where the IP holding is situated should have a considerable treaty network in order to allow for global exploitation of the IP rights, not forgetting that an exit route should always be available and beneficial. Or is it fifth-fold? Developments with regards to BEPS, transparency, tests on beneficial ownership and anti-treaty shopping provisions add another factor to the puzzle.

The recent changes effected in the IP holding taxation in Cyprus solve the problem. It is interesting to examine how.