In the Polish tax system there are reliefs that may prove attractive to enterprises planning innovative undertakings or investments in robotization. Also companies that launch new products on the market may benefit from tax support. In order to benefit from tax reliefs, certain conditions must be met.
It is also important to note that some tax preferences can be used simultaneously. Properly implemented tax reliefs can provide significant support to Polish entrepreneurs, so it is worth considering the possibility of taking advantage of them.
R&D tax relief in Poland
What is the R&D tax relief?An R&D activity is a creative activity including scientific research or development works undertaken in a systematic way in order to increase knowledge resources and to use these knowledge resources to create new applications. Expenses on R&D activity are tax deductible costs but they may also be so called qualified costs, which allow to take advantage of the R&D relief and to pay a lower corporate income tax.
When can I take advantage of the R&D tax relief?As a rule, entrepreneurs introducing new products, services or processes to their offer or working on improvement of products, services or processes can take advantage of this relief. It is sufficient to carry out development activity, one does not have to conduct scientific research, have a status of a research and development center or cooperate with scientific units. It is important to note that the R&D tax credit can also be claimed for previous years by submitting a correction to the tax return.
What can you gain thanks to the R&D tax relief?
The R&D tax relief allows to recover up to 38% of expenses incurred on R&D activity. Within the relief one can deduct expenses for: salaries and contributions financed by the employer (employment contract, contract of specific work and contract of mandate), purchase of materials and raw materials, purchase of specialized equipment which are not fixed assets, expert opinions, consultancy and equivalent services, as well as purchase of research results, obtaining and maintaining a patent, right of protection for a utility model, right from registration of an industrial design.
| With R&D tax relief | Without R&D tax relief | |
|---|---|---|
| Income | 100 000 PLN | 100 000 PLN |
| Employment cost (R&D) | 20 000 PLN | 20 000 PLN |
| R&D relief (200% value of R&D expenditures) | 40 000 PLN | 0 PLN |
| Tax base | 40 000 PLN | 80 000 PLN |
| Tax | 40 000 * 19% = 7 600 PLN | 80 000 PLN * 0,19 = 15 200 PLN |
| Total tax burden reduction: | 50% (7 600 PLN) |
Learn more about the tax incentives for R&D, IP Box, robotisation, prototype, expansion and 50% tax-deductible costs!
IP Box relief in Poland
What is the IP Box relief?
The aim of the IP Box is to increase the attractiveness of running innovative business in Poland and to encourage entrepreneurs to seek business potential in activities related to intellectual property rights. The IP Box relief allows a preferential tax rate to be applied to income derived from intellectual property rights in the amount of 5%.
When can IP Box relief be used?
The relief is available to PIT and CIT taxpayers who have created, developed or improved qualified intellectual property rights as part of their research and development activity, regardless of the size of their company or industry, and derive income from them. As a rule, it is sufficient for a taxpayer, for example, to develop an innovative product that will later be commercialized, provided that the taxpayer files a patent application for this product.
What can you gain from the IP Box?
The IP Box relief allows you to benefit from a preferential tax rate of 5% with respect to income from qualified intellectual property rights. The relief can be used to account for income from: patents, utility model protection rights, industrial design registration rights, integrated circuit topography registration rights, supplementary protection rights for patents for medicinal products or plant protection products, right from registration of medicinal products and veterinary medicinal products approved for marketing, exclusive rights referred to in the Act of 26 June 2003 on legal protection of plant varieties, copyright for computer programs.
Prototype Tax Credit in Poland
What is the prototype tax relief?
The prototype tax relief is designated for PIT and CIT taxpayers. The relief is an extension of the R&D tax deduction and covers the stage from completion of R&D work to mass production of the developed product. It allows for cheaper prototyping and consequently for implementation of the invention into production.
When can I take advantage of the prototype tax relief?
The prototype tax relief is dedicated to all business entities that as a result of research and development work create a new product and then introduce it on the market. The relief is a tax incentive related to the promotion of R&D activity. The introduction of the prototype tax relief is an extension of the already existing R&D relief and covers the stage from completion of R&D works to commencement of mass production of the developed product.
What are the benefits of the prototype relief?
Expenses incurred on the purchase of fixed assets for the production of a new product are deductible from the tax base in the amount of 30%. In other words, in addition to the standard deduction for fixed assets, a taxpayer taking advantage of the prototype tax relief will be able to deduct 30% of these expenses from the tax base.
In addition to the expenditures incurred for the purchase of fixed assets, the prototype relief may deduct the costs of launching a new product on the market, which include the costs of: research, expert opinions, preparation of documentation necessary to obtain a certificate, homologation, CE mark, safety mark, obtaining or maintaining a marketing permit or other mandatory documents or markings related to permitting marketing or use, and the costs of fees charged to obtain, renew or extend them; product life cycle testing; environmental technology verification system.
Our expert Michał Rodak is there to help.
Expansion Relief in Poland
What is the tax relief for expansion?
The expansions relief is addressed to entrepreneurs who are PIT or CIT taxpayers. It allows the entrepreneur to settle the costs incurred to increase sales of products twice – once by recognising the expense as a tax-deductible cost and a second time by reducing the taxable amount when filing the annual return.
When can I take advantage of the expansion relief?
The expansion relief covers expenses incurred for: participation in fairs; promotional and information activities; adaptation of product packaging to the requirements of contractors; preparation of documentation enabling the sale of products, in particular concerning the certification of goods and registration of trademarks; preparation of documentation necessary to participate in tenders and to submit offers to other entities.
What can you gain from the tax deduction for expansion?
The expansion relief allows for tax savings of up to PLN 190,000 per year (the deduction is limited to the amount of income earned by the entrepreneur – but cannot exceed PLN 1 million per year).
Robotization Tax Credit in Poland
What is the robotization tax credit?
The robotization tax credit is aimed at entrepreneurs who are PIT or CIT taxpayers. It is intended to encourage entrepreneurs to robotize their industrial processes by purchasing industrial robots.
When can you take advantage of the robotization tax credit?
The robotization tax credit can be availed of when expenses are incurred to automate (robotize) a business. The robots and other machines acquired must be new. The relief can be claimed even if the taxpayer is not engaged in research and development activities.
What can be gained from the relief on robotization?
Relief for robotization, in addition to the right to account for expenses as deductible costs through depreciation, gives taxpayers the opportunity to deduct from the tax base an amount representing 50% of the costs incurred for robotization.
The relief applies to: the costs of acquisition of brand new industrial robots; machines and peripheral equipment for industrial robots functionally linked to industrial robots, which serve to ensure ergonomics and occupational safety with respect to those jobs where there is human interaction with an industrial robot; costs of acquisition of intangible assets necessary for the proper launch and commissioning of industrial robots and other fixed assets mentioned above; costs of acquisition of training services for industrial robots and other fixed assets or intangible assets mentioned above.
