I was wondering if it would be possible to claim the lower tax rate Cyprus gives to IP companies, considering we basically “license” our content to YouTube and receive royalties for it.
Lower Cyprus Tax for Youtube Business due to IP?
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Hello, it is likely that you could, but this really depends on various factors regarding the overall operation. Id you would like to discuss this, I would be happy to PM you.
Please explain which factors are you talking about.
I never thought about uploading videos to YouTube as licensong content to YouTube.
We have had this discussion with the authorities before, this type of activities are excluded from the IP box. In any proposed structure for the IP box it is always suggested that a tax ruling is obtained from the beginning as soon as the Cyprus company is set up
So why @CyprusLawyer101 said it's possible? AFAIK to make use of the IP Box you have to invest in R&D in Cyprus and use the result of that R&D to fuel the IP Box. I
f you don't invest in R&D basically you will not acces IP Box, this is what i know so far.
Usually youtube ads revenue is not considered a qualifying asset under the IP BOX Regime.
Please note that Qualifying assets under the new regime include:
Ӣ patents,
Ӣ copyrighted software programs, and
Ӣ other intangible assets that are non-obvious, useful and novel.
Qualifying assets do not include trademarks and copyrights.
However, a Cyprus setup still offers a good tax optimisation vehicle and there are other tax incentives you can use to minimise tax liability such as notional interest deduction on new Equity.
Hope this helps
Please note that Qualifying assets under the new regime include:
Ӣ patents,
Ӣ copyrighted software programs, and
Ӣ other intangible assets that are non-obvious, useful and novel.
Qualifying assets do not include trademarks and copyrights.
However, a Cyprus setup still offers a good tax optimisation vehicle and there are other tax incentives you can use to minimise tax liability such as notional interest deduction on new Equity.
Hope this helps
Hello everyone,
Cypruslaw is right. Copyrights are not considered qualifying assets for the purpose of the IP box regime.
Though income generated therefrom should still be characterized as royalties.
Cypruslaw is right. Copyrights are not considered qualifying assets for the purpose of the IP box regime.
Though income generated therefrom should still be characterized as royalties.
do you mind to tell us some of them ?
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@clemens The notional interest deduction to which CyprusBusiness makes reference to essentially provides for an allowable expense in the form of notional interest calculated on any new capital injected into the company. This capital can also be in the form of assets, so for example an IP asset injected into a Cyprus company can have a notional interest as an allowable expense which could subatantially lower the effective tax on profits generated from royalty income emanatung from the IP asset injected into the company as capital.
Yes as @CyprusLawyer101 mentioned this NID is a notional interest deduction on new equity and has the following characteristics:
- Notional interest to be calculated on new equity contributed in the company after 1 January 2015 is to be deducted for tax purposes for the year the equity is contributed
- The contribution can be in the form of paid up share capital and share premium. The payment can be in cash or in-kind but in case of an in- kind contribution, the value of this contribution cannot exceed the market value of the asset contributed
- The NID interest rate is the yield on 10 year government bonds ( as at 31 December of the previous tax year) of the country where the funds are to be invested plus a 3% margin with a minimum interest being the 10 year Cyprus government bonds.
- The tax deduction cannot exceed 80% of the taxable income of the company.
- Where the company has taxable losses, the NID cannot be claimed
If any investor opts to this scheme any in kind contribution in the form of IP or any other asset must be substantiated by a valuation so to abide with Cyprus Companies Law.
Sorry to revive this thread but curious if IP box regime applies to things like domain names, websites, trademarks etc?
In businesses I built domain name and website files are the 95% of the business value.
Say CY Ltd owns domain/website and rents it to a foreign company for say X% of net profit, would CY company be able to claim the IP tax regime?
In businesses I built domain name and website files are the 95% of the business value.
Say CY Ltd owns domain/website and rents it to a foreign company for say X% of net profit, would CY company be able to claim the IP tax regime?
Trademarks are not included in the qualifying assets. It's mainly patents and software.
Does the software need to be licensed to the customer or is a subscription for a monthly fee (SaaS = without license) sufficient for IPBox in Cyprus?
It doesnt matter, what matters are the costs incurred in Cyprus to develop the software.
Back to square one: no R&D, no IPbox.
Possible from what aspect? Let me know what is your activity and structure to reply on this
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