Intellectual Property rights are rights recognised on the intangible work of man. These can be divided in two main categories; Copyright and Industrial Property. To put it simply whereas Copyright refers to literary and artistic works, Industrial Property covers invention, ideas and designs. In Cyprus the Law not only protects Intellectual Property but also creates a favourable tax regime for the owner. This article will briefly explain what can be defined as Intellectual Property and how this is protected in Cyprus, before examining the benefits.
2. Copyright and Rights related to Copyright.
The protection of Copyright in Cyprus is governed by the Copyright Law 59/76 and its subsequent amendments, hereinafter referred to as “the Law”. Copyright is recognized on scientific, literary, musical, artistic and cinematographic works, photographs, sound recordings and broadcasts. The Law grants protection to Cypriot nationals for published works globally and foreign nationals for works published in Cyprus.
According to the Law, Copyright does not require registration; it is protected automatically, unlike Trade Marks and Patents. Another difference is that while copyright protects the expression of an idea, Patent Law protects the idea itself.
3. Industrial Property
Trademarks, patents and industrial designs fall under this category. The authority through which applications are filed and certificates are issued is the Department of the Registrar of Companies and Official Receiver, which falls under the Ministry of Energy, Commerce, Industry and Tourism.
In Cyprus, the registration of Trade Marks and Service Marks is carried out in accordance with the Trade Marks Law Cap. 268, as amended, in conjunction with the Paris International Convention for the Protection of Industrial Property (Laws 63/65 and 66/83).
Patents are protected under the Patents Law (N.16 (I)/98). In Accordance to the legislation, any natural or legal person can file an application requesting protection of new inventions.
4. Tax Benefits.
Under the Cyprus Tax Regime, owners of Intellectual Property enjoy several tax exemptions from the profits acquired from the use or sale of those rights.
The expenses for acquiring or development of Intellectual Property Rights are exempt from the taxable income.
Where loss arises out of the acquiring or developing of Intellectual Property, only 20% of the loss will be offset against income from other sources or carried forward to be offset against income of subsequent tax years.
80% of the profits earned by the use of Intellectual Property Rights, are deducted from the taxable income as an expense. The profit is calculated by deducting the expenses occurred for earning this income, from the income obtained by using I.P. rights.
Limassol January 2016
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