CYPRUS Law and Practice Contributed by: Stella Strati, Patrikios Legal
9.14 Offshore IP Provisions The payment of royalties to a non-Cyprus tax resident is subject to a maximum 10% withholding tax on the gross amount of such payment if the royalty rights were used in Cyprus.
a flat 8% rate. Losses can only offset gains within the same tax year. Crypto obtained through mining is excluded from this regime and taxed under general income tax rules. As regards VAT taxation, digital services are taxed where the consumer resides, with compliance man - aged through the One Stop Shop (OSS) scheme for cross-border transactions. 9.13 Approach to Digital Services Taxation Cyprus has taken certain action in relation to digital taxation. The continuous development of the digital economy has triggered stricter rules on Cyprus VAT for digital services, especially for non-EU providers targeting Cypriot consumers. Digital services, including stream - ing, software, and cloud services, are taxed where the consumer resides. Moreover, businesses must regis - ter under the OSS scheme if providing services across EU member states. In addition, electronic invoicing and record-keeping requirements are tightening, demanding real-time reporting capabilities. It is expected that further regulation will be introduced in relation to digital services taxation.
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