Tax incentives for investors (R&D tax credit, IP box)

Research and development tax credit. New R&D tax credit. Innovation Box 2019. Support for entrepreneurs implementing R&D.

R&D tax credit. Innovation Box. Changes in tax law 2019. Research and development.

Since 2016 companies conducting research and development activity in Poland have been entitled to R&D tax credit allowing for additional deduction of the part of tax-deductible costs incurred for this type of activity - so called "eligible costs" - and thus reduction of the tax (CIT/PIT) payable. As of 1 January 2018, amendments have been introduced to the R&D tax credit. These changes resulted in extension of the catalogue of eligible deductible costs and increase of the amount of deductible expenditures.

The table below presents the increase in deductions for tax credit in recent years:

Tax credit rates for 2016	Tax credit rates for 2017	Tax credit rates for 2018 and subsequent
30% of salaries of employees and social security payments (ZUS) 10% (20% for SME) of other costs connected with research and development activity	50% of salaries of employees and social security payments (ZUS) 30% (50% for SME) of other costs connected with research and development activity	100% of all the types of eligible R&D expenditures 150% of all the types of eligible R&D expenditures for taxpayers holding the CBR status

Tax credit rates for 2016

Tax credit rates
for 2017

Tax credit rates for 2018 and subsequent

30% of salaries of employees and social security payments (ZUS)

10% (20% for SME) of other costs connected with research and development activity

50% of salaries of employees and social security payments (ZUS)

30% (50% for SME) of other costs
connected with research and development activity

100% of all the types of eligible R&D expenditures

150% of all the types of
eligible R&D expenditures for taxpayers holding the CBR status

Benefits for the business resulting from the application of the R&D tax credit:

a significant incentive in the form of an additional deduction of eligible costs from the tax base and thus a reduction of the tax (CIT/PIT) payable,
an essential factor in the policy of a respective international capital group in favour of establishing or relocating R&D centres to Poland or increasing expenditures on such works in Poland,
increasing the competitiveness of the entity within the respective industry.

The R&D tax credit may be combined to some extent with the remuneration structure of creative employees, which assumes the application of 50% of tax-deductible costs.

The R&D tax credit may be supplemented by the Innovation Box solution which allows to tax revenues from the commercialisation of intellectual property rights resulting from R&D at a preferential tax rate of 5%.

In this respect, the International Corporate Tax Team offers its Clients support within the following areas:

verification of the eligibility to R&D tax credit (R&D, IP box, other supporting tools),
preparation of tax ruling applications in order to tax position related to key aspects of the tax incentives for investors,
R&D tax credit calculation, the framework procedure of the calculation and support in computing the deduction,
on-going support with regard to all issues relating to the R&D tax credit,
support in the case of a tax audit regarding the deduction claimed.