IP Box Tax Calculator
Use this tool to calculate your Qualified Profit (QP), Deduction, Taxable Profit, Payable Tax, and Effective Tax Rate (ETR) in accordance with the Cyprus IP Box Regime. Enter the values that best represent your income and expenditures. Detailed explanations and formulas are provided below.
Results
Overall Income (OI): €-
Overall Expenditure (OE): €-
Qualifying Expenditure (QE): €-
Uplift Expenditure (UE): €-
Qualified Profit (QP): €-
Deduction (80% of QP): €-
Taxable Profit (TP) (OI – Deduction): €-
Payable Tax (PT) (12.5% of TP): €-
Effective Tax Rate (ETR): %
Calculator Explanations & Conditions
Overall Income (OI): Gross income from qualifying intangible assets, computed as: License and Royalties + Services with Embedded QIA – Direct Costs.
Overall Expenditure (OE): Total expenditure related to the intangible assets (all R&D costs plus asset acquisition).
Qualifying Expenditure (QE): The sum of internal and non-related R&D costs (excluding acquisition, interest, etc.).
Uplift Expenditure (UE): The lower of 30% of QE or (Asset Cost + Related R&D costs).
Qualified Profit (QP): Calculated as QP = OI × ((QE + UE) / OE).
Deduction: 80% of QP is deductible, reducing the taxable profit.
Taxable Profit (TP): OI minus Deduction.
Payable Tax (PT): 12.5% of the Taxable Profit.
Effective Tax Rate (ETR): (PT / OI) × 100%.
Qualifying Intangible Assets (QIA): Assets derived from R&D (e.g., patents, software) that are legally protected—excluding marketing-related IP like trademarks or image rights.
Non-Qualifying Assets: Items (such as goodwill) and expenditures that do not meet qualifying criteria.
Calculation Formulas:
• OI = License and Royalties + Services – Direct Costs
• QE = Internal R&D + External R&D
• UE = min(30% × QE, Asset Cost + Related R&D)
• QP = OI × ((QE + UE) / OE)
• Deduction = 80% × QP
• TP = OI – Deduction
• PT = TP × 12.5%
• ETR = (PT / OI) × 100%
For more details, please refer to our guide on the
Cyprus IP Box Regime.
