This guide is written for freelance software developers, tech startups and IT companies. Rules change regularly and individual circumstances vary, so speak to a Tsquared accountant before acting. We regularly help clients with ip box 2.5% effective tax, freelancer vs. company, vat on cross-border digital services.
Key points
- Tax at exercise
- 8% regime for qualifying schemes
- Documentation
- Payroll reporting
Challenges you face, solutions we provide
Challenge: IP Box 2.5% effective tax
Our solution: IP Box eligibility assessed and nexus documentation kept current
Challenge: Freelancer vs. company
Our solution: Freelance vs. company comparison with real numbers before you switch
Challenge: VAT on cross-border digital services
Our solution: Reverse-charge and OSS VAT handled correctly on every cross-border invoice
Challenge: Stock options and equity
Our solution: Option schemes structured for the flat 8% regime with payroll reporting
Challenge: R&D cost tracking
Our solution: The 120% R&D super-deduction claimed with timesheet evidence
Frequently asked questions
- Employee stock options: what's the short answer?
- Cyprus taxes stock options when exercised, but from 2026 approved employer schemes are taxed at a flat 8% (up to €1m over 10 years), which helps attract tech talent.
- Can Tsquared help with employee stock options?
- Yes. We advise freelance software developers, tech startups and IT companies in Cyprus on employee stock options and handle the filings for you.