How does the 3% illustration arise?
If 100 units of relevant profit fully qualify for an 80% deduction, 20 units remain subject to a 15% corporate rate, giving 3 units of tax in that simplified calculation. Partial nexus qualification, non-qualifying income and other applicable rules can change the result.
The ordinary corporate-rate change should not be conflated with the separate Pillar Two minimum-tax framework. Assess any group-level minimum-tax obligations independently where relevant.
Which income and assets need analysis?
The Ministry of Finance describes the incentive by reference to qualifying intangible-asset profit and the nexus approach. Software can be relevant, but ownership, development, income allocation and expenditure evidence must support the claim.
A casino brand or marketing asset should not be treated as qualifying software merely because it is used online. Likewise, all player receipts cannot automatically be classified as IP income. Identify the actual rights and economic activity before calculating a deduction.
Get the right structure for your case
Book a free, no-obligation consultation. We’ll confirm the right Cyprus company + licence setup and a fixed fee for your business.
What evidence should an iGaming group assemble?
Build a factual file that can support both eligibility and the calculation.
- Software ownership and contributor agreements.
- The development activity and relevant expenditure records.
- Related-party and unrelated-party outsourcing details.
- The income attributable to the qualifying asset.
- The nexus calculation and assumptions.
- Intercompany pricing and the entity’s actual functions.
What about withholding tax, VAT and gaming taxes?
Do not summarise every outgoing payment as tax-free or every group service as VAT-exempt. The recipient, payment type, use of rights, place of supply and anti-abuse provisions can matter.
Gaming-specific taxes in an operating market are separate from Cyprus corporate income tax. Obtain a transaction-by-transaction assessment for royalties, dividends, interest and services rather than applying one marketing headline to the entire group.
What should be decided before restructuring?
Compare the proposed structure with the actual development team, rights and commercial contracts. Moving legal ownership alone does not establish the desired nexus result or transfer-pricing outcome.
Use the detailed nexus guide for the expenditure mechanics and the substance and transfer-pricing guides for their distinct factual questions. A useful tax analysis states its assumptions and exceptions clearly, rather than promising that every gaming company can pay 3%.
Sources and scope
- Cyprus Tax Department — 2026 tax reform
- Cyprus Ministry of Finance — IP incentives
- Cyprus Tax Department — Pillar Two
This guide was prepared with AI assistance using the linked sources. It provides general information and practical preparation suggestions, not a legal opinion for a particular business. No personal professional review is claimed.
Related guides
Get the right structure for your case
Book a free, no-obligation consultation. We’ll confirm the right Cyprus company + licence setup and a fixed fee for your business.