3%, not 2.5%
80% of qualifying profit is exempt and the rest is taxed at 15%, so 3% at a full nexus fraction. The 2.5% figure is from before 2026, when the rate was 12.5%.
What the IP Box would save you.
Tell us what the asset is, what it earns and what it cost to develop. The nexus fraction is worked out in front of you.
Royalties, licence fees, embedded income
Including amortisation
In-house, or outsourced to unrelated parties
The uplift expenditure
The formula
(qualifying €400,000 + uplift €50,000) / overall €450,000 = 100.00%
Uplift is the related and acquisition spend, capped at 30% of qualifying expenditure. Overall expenditure is qualifying plus acquisition and related outsourcing. The fraction never exceeds 100%.
What the IP Box saves, per year
€60,000
in corporate tax. The effective rate on this IP profit is 3.00%, against 15% without the regime.
IP profit (income less expenses)€500,000
Nexus fraction100.00%
Qualifying profit€500,000
Tax without the IP Box (15%)€75,000
Tax with the IP Box€15,000
Saving€60,000
80% of qualifying profit is exempt and the rest is taxed at 15%, so 3% at a full nexus fraction. The 2.5% still quoted elsewhere is the pre-2026 figure.
An illustrative estimate under the 2026 Cyprus rules, not tax advice. Your own position depends on facts this tool does not ask about, and is confirmed on a call.
Three things that decide whether the saving is real.
Brands do not qualify
Patents, copyrighted software and some other novel IP qualify. Trademarks, brand names and other marketing intangibles do not.
The nexus fraction needs records
The fraction rewards R&D the company does itself or buys from unrelated parties. Related-party and acquisition spend counts only up to 30% of that. It has to be tracked, asset by asset.
The rate is 3%. The work is the nexus.
The saving depends on which assets qualify and how the expenditure is tracked. A partner can look at your structure and tell you what would stand up.
No slide deck. No obligation.