Question 2.5% tax via Cyprus IP box for physical products' utility model.

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Hey guys, is there anyone who has experience with the Cyprus IP box regime?

I was reading that a qualifying IP can also be a utility model, basically, if you developed a "unique" physical product that has some improvements you can register it as a utility model.

Here's the definition from the European Commission website Utility models:

What is a utility model?​

Utility models provide fast and low-cost protection for technical inventions since they are usually granted without substantive examination. For this reason, they are more accessible to individual innovators or small and medium-sized enterprises (SMEs) than patents, to which they are similar in their principle. In some countries, utility models may be referred to as 'petty patents' or 'innovation patents'.

This is another useful description from the WIPO website Utility models:

Utility models​

In some countries, a utility model system provides protection of so-called “minor inventions” through a system similar to the patent system. Recognizing that minor improvements of existing products, which does not fulfill the patentability requirements, may have an important role in a local innovation system, utility models protect such inventions through granting an exclusive right, which allows the right holder to prevent others from commercially using the protected invention, without his authorization, for a limited period of time.

This means that if your product qualifies for the utility model protection you are allowed to use the Cyprus IP box regime using a holding company.

The other alternative is a patent, this would allow longer protection, thus a longer tax optimization strategy the downside is that it's more complicated.

What do you think about this strategy? Am I missing something?

 

[koohl]

Wonder if @CyprusLawyer101 or @CyprusBusiness can help. i'm in a situation where I would need more information about the IP rights in Cyprus in an particular case.

 

[kkein]

Hey guys, is there anyone who has experience with the Cyprus IP box regime?

I was reading that a qualifying IP can also be a utility model, basically, if you developed a "unique" physical product that has some improvements you can register it as a utility model.

Here's the definition from the European Commission website Utility models:



This is another useful description from the WIPO website Utility models:



This means that if your product qualifies for the utility model protection you are allowed to use the Cyprus IP box regime using a holding company.

The other alternative is a patent, this would allow longer protection, thus a longer tax optimization strategy the downside is that it's more complicated.

What do you think about this strategy? Am I missing something?

If you have a patent you definitely qualify. Something else new that has not been protected in any way might be difficult to defend when applying for the tax rebate (talking about physical products).
With software it's different, as long as you sell the software and not disclose the source code, or have a restrictive open source license that does not allow others to sell or modify your software.