Apply for the Cyprus IP Box.Keep the claim.
The Cyprus IP Box grants an 80% deemed deduction on the qualifying profit from a qualifying asset — patents and copyrighted software the company developed. Trademarks, brands and other marketing intangibles are excluded. Where the whole profit qualifies, the effective rate on it falls to about 3% — an 80% deduction against the 15% corporate income tax rate that applies from 2026, or about 2.5% under the pre-2026 rate of 12.5% — and it rises pro-rata as the nexus fraction drops below 1.00.
There is no separate form to file — the claim is made in the company’s corporate income tax return, and it stands or falls on the per-asset records behind it. Sumly helps you apply, and then keeps the qualifying income, the development spend and the deduction itself tracked inside your books, year after year.
The claim, and the records it rests on
The IP Box is the largest single line in a Cyprus product company's tax position — and the easiest one to forfeit through bookkeeping that was never set up for it.
Claimed on the return, not on a form
The Cyprus IP Box has no application form of its own: the deduction is taken in the company's corporate income tax return. For each qualifying asset you arrive at the qualifying profit, scale it by the nexus fraction, and deduct 80% of the result as a deemed expense — whatever is left joins the company's other taxable income. Sumly helps you get the claim set up, and computes it from the same ledger the return is prepared from.
- No standalone IP Box form — the deduction sits in the corporate income tax return
- Computed from the same ledger the return is prepared from
- You review and file on Base; your Sumly certified bookkeeper submits on Premium
What qualifies — and what plainly does not
Qualifying assets include patents and copyrighted software the company developed. Trademarks, brands and other marketing intangibles are excluded, and deliberately so: the modern regime rewards development, not brand ownership. Whether your particular asset or income stream qualifies is a tax question, worth settling with your adviser or auditor before the first invoice rather than at year end. What Sumly does is the bookkeeping half of the claim — which is the half that usually decides it.
- Patents and copyrighted software the company developed
- Trademarks, brands and marketing intangibles: excluded
- Settled before the first invoice, not reconstructed at year end
The nexus fraction decides how much you keep
The deduction is scaled by the share of the development you actually did: your own R&D plus R&D outsourced to unrelated parties, with a 30% uplift, over total spend — capped at 1.00. Build it in-house and the fraction sits at one, and the full deduction applies. Buy the IP in, or outsource it to a related party, and the fraction falls and the effective rate rises with it. That split is ordinary cost tagging in the ledger: payroll, contractor and related-party invoices coded to the asset they built.
- Own R&D plus unrelated outsourcing, with a 30% uplift
- Capped at 1.00 — acquisition and related-party work pull it down
- Expenditure coded per asset in the same ledger, from day one
From asset to deduction
Tell us what you've built
The asset, who developed it, and where the income comes from. A conversation first — there is no form to fill in before you have talked to a person.
Set it up per asset
Qualifying income tagged to the asset it comes from, and development spend coded against it, so the nexus fraction is built from the ledger rather than reconstructed later.
Claimed on the return
The deemed deduction is taken in the corporate income tax return. You review and file it on Base; your Sumly certified bookkeeper submits it on Premium.
Evidenced every year after
IP Box tracking keeps running inside Sumly — €50 a month on top of your plan — so next year's claim is already documented rather than assembled.
IP Box questions, answered
The questions product companies ask before they claim the deduction.
What is the Cyprus IP Box regime?
A Cyprus regime granting an 80% deemed deduction on the qualifying profit from qualifying intangible assets — patents and copyrighted software the company developed, never trademarks or other marketing intangibles. Where the nexus fraction reaches 1.00, the effective rate on that profit is as low as ~3% (an 80% deduction against the 15% corporate income tax rate from 2026; ~2.5% under the pre-2026 12.5% rate).
Does software qualify for the Cyprus IP Box?
Copyrighted software the company developed is a qualifying asset, which is why the regime matters so much to product and SaaS companies. Buying finished software and reselling it is a different situation — the regime rewards development you did, not distribution rights you acquired. Trademarks and brands never qualify.
Who should apply for the IP Box in Cyprus?
Cyprus companies whose profit comes from IP they developed themselves — product and SaaS companies with their own codebase, and patent holders. Own R&D and R&D outsourced to unrelated parties both count, with a 30% uplift, while acquisition and related-party development pull the benefit down. The more of the development you did in-house, the higher the nexus fraction and the more of the deduction you keep.
How do you apply for the Cyprus IP Box?
There is no separate IP Box application form. The claim is made in the company's corporate income tax return: for each qualifying asset you take the qualifying profit, scale it by the nexus fraction, and deduct 80% of the result. What the claim actually rests on is the per-asset evidence behind those figures, and that evidence is built during the year rather than assembled at the end of it. Our guide to claiming the Cyprus IP Box walks through the full procedure.
Do I have to apply for the IP Box before I start earning?
There is nothing to lodge in advance, but the tagging should start with the first invoice for the asset. The claim itself is made later, in the corporate income tax return, and what it needs is a year of per-asset income and expenditure records behind it. Starting the records late is what costs people the claim.
What does the IP Box actually save?
At a nexus fraction of 1.00 the effective rate on qualifying profit is as low as ~3% — an 80% deduction against the 15% corporate income tax rate. It is not a flat rate: as the fraction falls below one — because the IP was bought in, or developed by a related party — the rate rises pro-rata towards the headline corporate rate, so the saving is specific to your company.
What does it cost?
IP Box tracking runs inside Sumly as a paid add-on at €50 a month on top of your plan — it is never part of the base subscription. The application help itself starts as a conversation: tell us what you have built and what you want to claim, and we go through it with you.
Do I need a particular Sumly plan?
Yes — the add-on sits on top of a plan, and plans start at €39 a month for Base. On Base you review and file the corporate income tax return yourself; on Premium a Sumly certified bookkeeper reviews the books and submits the filings. The IP Box add-on works with either.
What happens after the IP Box claim is made?
It has to be evidenced again every year, which is what the add-on is for: qualifying income tagged per asset, the development spend behind the nexus fraction coded in the same ledger, and the 80% deduction calculated from live books. Our pricing page shows the add-on alongside the plans it sits on.
Can I claim the IP Box retroactively?
Not credibly. The claim rests on per-asset records of qualifying income and qualifying expenditure, and figures assembled at year end from memory are exactly what an auditor is entitled to be sceptical of. If you are starting now, start the tagging now — the first invoice for the asset is the right place to begin.
Related
- IP Box explained
What the regime is, who qualifies, and how the deduction is calculated.
- How to claim the Cyprus IP Box
The claim procedure, the nexus fraction worked through, and the records it needs.
- Cyprus tax for software companies
Where the IP Box sits in a product company's whole tax position.
- Dedicated bookkeeper (Premium)
Have the books reviewed and the corporate tax return filed for you.
- Pricing
Base, Premium and the IP Box add-on on top of either.
Talk through your IP Box claim
A 30-minute call about what you have built, who built it, and whether the deduction is realistically yours to claim.
Let's talk about your IP Box.
Tell us what you've built, who built it and what you want to claim — and we go through it with you before anything is committed.