Does Cyprus company paying tax on royalties?

blizz

Trusted Member
Business Angel
Mentor Group
I was wondering if a Cyprus company pay tax on royalties?

Are they exempted from other tax?
 

negon

hannibal the cannibal
BANNED MEMBER
Entrepreneur
Tax treaties withholding tax (WHT)
WHT on dividends, interest and royalties
Cyprus does not levy a WHT on dividends, interest and royalties paid to non-residents of Cyprus except in the case of royalties earned on rights used within Cyprus, which are subject to a WHT of 10% (5% in the case of cinematographic films). Such Cyprus WHT on royalties for rights used within Cyprus may be reduced or eliminated by double tax treaties entered into by Cyprus or by the EU Interest and Royalty Directive as enacted in the Cyprus tax legislation.
 

blizz

Trusted Member
Business Angel
Mentor Group
Other?
 

Chris K

New Member
I was wondering if a Cyprus company pay tax on royalties?

Are they exempted from other tax?

Regarding Royalty income in Cyprus: You get an 80% tax exemption.

Here is an example to help you understand how it works:

The tax on royalty income is as follows: Let's say we have a total of €100


Royalty income €100

Less: Direct expenses relating to royalty income €25



Net royalty income €75

Other trading income (not from IP) €20

Tax allowance 80% of €75 - €60

Taxable income €35



Tax payable €35 Χ 12,5% (Cyprus Corporate Tax) €4,38



All income from use of intellectual property e.g sale, rental etc (less direct expenses) is subject to 80% tax relief.


The above apply provided that the IP is registered in the name of the company.
 

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