The government’s development plan will soon become a new Polish reality. Thus, it is worth paying special attention to the extended package of tax reliefs that can be used at every stage of the production process. The proposed solutions are primarily aimed at increasing support for R&D activities in Poland.
Simultaneous R&D and IP Box relief
Both solutions have been known to Polish entrepreneurs for a long time. The Polish Deal, however, gives the opportunity to use these two preferences simultaneously and in a more flexible way. Until now it was impossible – the R&D tax relief and IP Box preferences could be used in the same tax year, but for different categories of income.
Taxpayers will no longer have to choose between two mutually exclusive preferences – when calculating income from qualifying intellectual property rights (IP Box), it will be possible to take into account the purchase price incurred for R&D activities, which led to the creation, development, or improvement of intellectual property right.
The new regulations also introduce a number of other changes of the above-mentioned instruments, including:
- the possibility for R&D Centers to deduct 200% of eligible R&D costs (previously: 150%) under the R&D tax relief,
- the possibility of deducting, under the R&D tax relief, “employee” costs in the amount of 200% for all taxpayers (previously: R&D Centers – 150%, other taxpayers – 100%).
Relief for a prototype
The relief would complement the R&D relief, which does not include a full catalog of expenses incurred in connection with:
- trial production (testing), and
- placing a new product on the market (e.g. certification and attestation).
The new relief would enable entrepreneurs to deduct from the tax base costs related to the above-mentioned stages of research and development activities.
The value of the deduction cannot exceed 30% of the costs incurred, but not more than 10% of the income derived by a taxpayer.
The eligible costs would be disclosed in the annual tax return submitted by the taxpayer for the tax year in which they were incurred, with the possibility of deducting them in the next 6 years following the year in which they were incurred.
The New Polish Deal bill introduces the definition of “trial production of a new product” and “placing a new product on the market”, as well as a catalog of qualified costs in both cases.
Relief for robotization
In this case, the taxpayers will have the option of additional deduction from income of half of the costs incurred for robotization, which have already been included in the tax-deductible costs.
The additional deduction may not exceed 50% of the costs and income obtained in the tax year by the taxpayer from business activity.
The deduction will include, among others: the costs of purchasing new industrial robots (and related machines and devices), software used for the correct operation of the robots as well as the costs of training employees for using new devices.
Relief for innovative employees
The relief is intended to develop the R&D relief, i.e. to enable additional deduction of expenses for employees involved in R&D activities. The current regulations do not contain solutions that would promote the employment of highly qualified employees as part of R&D activities.
The draft introduces the possibility of reducing the advance payment for personal income tax collected by the taxpayer as the tax remitter on employment income derived by innovative employees if the taxpayer (employer) recorded a loss in the tax year or did not generate income allowing for the available deduction under the R&D relief.
An innovative employee should be treated as an employee who spends at least 50% of his working time on R&D activities. This will also apply to persons providing services in the field of R&D activities under a contract of mandate and for specific work.
The relief will also be available to companies that did not generate any income from the investments in a given year.
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