Cyprus IP Box regime amended
The Cyprus Tax Legislation was recently amended with respect to the tax treatment of intangible assets providing increased flexibility to taxpayers benefiting from the Intellectual Property (IP) Box regime.
The amendments relate to the abolition of the requirement to prepare balancing statements and the tax treatment of capital allowances.
Summary of existing provisions
The capital expenditure of IPs is capitalized and capital allowances (tax depreciation) are claimed over the useful life of the asset, as determined by generally acceptable accounting principles (with a maximum useful life of 20 years).
- Preparation of balancing statement in case of disposal of the IPs.
The obligation to prepare a balancing statement on the disposal of an intangible asset is abolished. As such, no balancing addition or balancing deduction would be included in the taxpayer’s taxable income in the year of disposal.
- Capital Allowances
The taxpayer has the option not to claim capital allowances in a given year. Moreover, capital allowances that have not been claimed in a year are claimed over the remaining useful life of the asset. Consequently, the tax written down value of the IP at the beginning of each year will be recalculated over the remaining useful life of the IP.
The above amendments are effective as from 1 January 2020.
Managing Partner, ITP expert
PHS & Partners’ team of professionals are focused on delivering the best results to every company and group of companies to minimize tax exposure / liability without any uncertainties.
Contact us to help you find out how you can best handle your business.
If you want to work with professionals who provide exceptional quality standards of services in Cyprus, the simplest way is to fill in this contact form.
We will analyze your case and advice you on:
- What company structure suits you best,
- What is the best Tax solution(s) for your business,
- What Banking and cash flows arrangements available.
We will take you through a step by step process from A to Z in creating the perfect business in Cyprus.
Can’t wait any longer? Fill in the form and submit your inquiries make your first step and we will deal with the rest.
Become even more successful by working with accountants you can count on and be among the thousands that already did.
If you want to work with professionals who provide exceptional quality standards of services in Cyprus, the simplest way is to fill in the contact form below.
We will take you through a step by step process from A to Z in creating the perfect business structure in Cyprus.
Can’t wait any longer? Become even more successful by working with accountants you can count on and be among the thousands business that already did.