The Right to Family Reunification Under EU Law and Cyprus Legislation
Family reunification concerns cases where an individual residing in an EU Member State seeks to reunite with family members who remain in their country of …
In Brief
Qualifying Profit (QP) | Qualifying expenditure (QE) | Up-lift expenditure (UE) | Qualifying income (QA) | Overall Expenditure |
---|---|---|---|---|
• 80% deduction is applied to qualifying profits. | • R&D undertaken by the Cyprus company or outsourced. |
• Lower of: - 30% of QE and - Total cost of acquisitions |
• Any income emanating from the IP (see table above) | • The sum of expenditure for a qualifying IP |
Illustration:
Using the Nexus Approach Qualifying profits are calculated as follows:
QP = (500k+0)/500k * 2m
QP = 2m
Tax computation for the year
- Without the provisions of the IP Regime:
Taxable Royalty income (net of deductible expenses) | € 2m |
Income tax @12.5% | € 250k |
- With the provisions of IP regime:
Taxable Royalty income (net of deductible expenses) | € 2m |
Less deduction of 80% of qualifying profits | € 1.6m |
Total taxable income | € 400k |
Income tax @12.5% | € 50k |
Effective tax rate | 2,5 % |
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