As there are no withholding taxes on intellectual property royalties between member states within the European Union, we can suggest a number of countries where royalties are particularly advantageous.

BELGIUM
Belgium has introduced a tax system that favors income from acquired copyrights. This control system can have many different applications and can be used to protect works of art and as a useful tax break for IT developers. Income from IP rights royalties is taxed at 15%. This income is not taken into account when calculating social security contributions. In addition, these taxes are reduced by 50% due to the application of the standard import cost for imports. The first €15,000 that a copyright owner earns in a year is therefore taxed at 7.5%, the next €15,000 at 11.25%. This tax system applies to people with a total annual income of up to 56,450 euros.

THE NETHERLANDS
Since 2010, IP income has only been taxed at 5% in the Netherlands. Except for patents, there is no income limit. Patent holders can actually have access to this tax regime if their share of the expected revenue is between 30% and 70%, taking into account the total combined revenue from patents and other sources. These rates also apply to foreign companies owning intangible assets or companies that have received research and development accreditation from the Dutch Ministry of Economy if they are holders of software IP or trade secrets. The only other caveat to this cheap tax regime is that it doesn't apply to marketing and branding-related assets.

LUXEMBOURG
In general, corporate tax in Luxembourg is 29.22%, but for IP license income it can be as low as 5.8%. This is due to an 80% corporate income tax exemption. Interestingly, this exemption also applies to companies that have applied for a patent for use in their own business and then calculate a notional net return as if they received the royalty income.

ITALY
Italy is a larger market compared to the other countries discussed and can be a very attractive place for a company to invest in R&D as since 2015 companies have been able to deduct intellectual property income from their taxable income base. The tax deduction was set at 30% in 2015, 40% in 2016 and 50% from 2017. Companies will therefore enjoy a significant tax rebate due to the reduction in their taxable income.

IRELAND
In 2015 Ireland introduced an effective corporate tax rate of 6.25% on intellectual property income based on an allowance for research and development costs borne by the company. By linking the two components in this way, Irish law encourages companies to conduct R&D directly within the EU - leading to the creation of intellectual property - while discouraging them from acquiring licenses without directly engaging in R&D .

CYPRUS
The tax regime for intellectual property royalties in Cyprus has changed as a result of the recommendations of the Action Report of the Organization for Economic Co-operation and Development (OECD) 5 and the conclusions of the Ecofin Council published on 8 December 2015 Companies benefiting from exemptions for research and development (R&D) can benefit, but the tax rate in Cyprus is still one of the most favorable in the EU for foreign companies using Cyprus IP and wishing to license resident companies (intermediaries) where this right is then sub-licensed to the end user. Overall, the effective tax on IP royalties should be less than 2.5%.

https://www.confiduss.com/en/jurisdictions/cyprus/business/company-formation/