Foreign expansion relief

Reduce the cost of entering a new market

Foreign
expansion relief

The foreign expansion relief (pro-growth relief) was ushered in with the tax amendment package of the Polish Deal introduced on January 1st, 2022. The new relief aspires to encourage investment in a company’s development and incentivize the search for new markets. The foreign expansion relief may be merged with the R&D relief, robotics relief, or IP Box relief, creating a complex tool for company growth.

Why is it worth considering?

The beneficiaries of this relief are CIT and PIT taxpayers making settlements under general rules of the tax scale, and according to the flat rate, who intend to grow their company by means of domestic or international expansion. These taxpayers may deduct costs associated with increasing income from product sales in two stages - settling them as standard tax-deductible costs, and subsequently as part of the relief.

For whom?

Taxpayers who opt to take advantage of foreign expansion relief will be able to deduct costs correlated with:

participating in fairs - costs of purchasing an exhibition area; employee plane tickets along with board and accommodation;
promotional activities - costs of purchasing advertising, website preparation, press publications, the printing of leaflets or brochures;
adapting product packaging to requirements of contractors;
preparing documentation enabling the sale of products;
preparing documentation essential for tender accession, as well as for making proposals to other entities.

Contact

Łukasz Kempa

Head of Tax Advisory, Tax Advisor

l.kempa@krgroup.pl

(+48) 539 677 518

FAQ

Who exactly may benefit from this relief?

The foreign expansion relief may be applied by PIT taxpayers (settling taxes along the tax scale or the flat tax) as well as CIT taxpayers planning to grow their business in Poland and beyond the country’s borders. According to the assumption of the Ministry of Finance, the relief will enable an increase in revenue which will aid companies in their further development.

Are there any conditions that must be met?

Yes, the condition for deducting expenses is an increase in income from product sales for two years from the tax year when the taxpayer incurred costs. It is important to note that the relief cannot be applied when reselling goods to affiliated entities.

Is there a limit on using the relief?

Yes, it is not possible to deduct more than 1 000 000 PLN during a tax year. In case of a loss during a given tax year, income may be deducted during the next 6 years.