How is an iGaming company taxed in Cyprus?
A Cyprus company pays a 15% headline corporate income tax (from 1 January 2026, aligning with the OECD Pillar Two global minimum). Income from qualifying software IP is taxed at roughly 3% effective under the IP Box. There is generally no withholding tax on profits paid to non-resident owners, and betting and gambling services are generally VAT-exempt. Importantly, the gaming tax is paid in the foreign licence jurisdiction — not in Cyprus.
Source: PwC Tax Summaries.
What is the Cyprus IP Box and does it apply to iGaming?
The IP Box is a regime that taxes income from qualifying intellectual property at a much lower effective rate. It applies to iGaming where the software qualifies: copyright-protected computer software — such as your platform or game engine — can qualify, provided it is created through genuine research and development (the modified nexus approach). Trademarks, brand names and marketing intangibles do not qualify.
Source: Mondaq — Cyprus IP Box.
How the ~3% effective rate works
The IP Box gives an 80% notional deduction on qualifying IP profit. Only the remaining 20% is taxed at the 15% headline rate:
- 100% qualifying IP profit → 80% deducted → 20% taxable
- 20% taxable × 15% corporate tax = ~3% effective
In practice the rate depends on the R&D nexus fraction and your cost base, so treat ~3% as the indicative effective rate on qualifying income, confirmed case by case.