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R&D relief

Reduce your tax obligations by claiming an additional deduction from your tax base for eligible expenses

Relief
 R&D

R&D relief, introduced in 2016, allows enterprises to claim tax preferences without having to complete extensive applications or maintain complicated accounting documentation. Enterprises conducting research and development activity can claim an additional deduction of eligible expenses from their tax base, thus reducing their tax obligations for the tax year.

A few words about your activity

A taxpayer intending to claim R&D relief should also examine whether its activity can be regarded as:

  1. Creative (i.e. activity aimed at creating new, original and unique solutions, not of an imitative nature).
  2. Undertaken systematically (i.e. in a planned, ordered and methodical manner, not routine or periodic, and according to a timetable).
  3. Undertaken to increase the stock of knowledge and the use of this knowledge to devise new applications.
  4. Including scientific research or experimental development..

Are you interested in current changes in regulation? Check updates

Do I need it?

For the majority! If you are expanding your product line to include new goods or services, or modifying existing goods and services, it is highly likely that you meet the conditions to claim R&D relief. The results of your efforts need not be entirely new and innovative solutions.

You can claim R&D relief if you are a taxpayer who meets the following conditions:

  1. The taxpayer conducts R&D activity or holds the status of an R&D centre.
  2. The taxpayer generates revenue other than capital gains.
  3. The taxpayer has incurred expenditures on R&D activity.
  4. The R&D costs fall within the statutory catalogue of eligible expenditures.
  5. The R&D costs constitute revenue-earning costs for the taxpayer.
  6. The taxpayer has separately identified eligible costs in the accounting records.
  7. The amount of eligible expenditures do not exceed specified limits.
  8. The taxpayer claims the eligible expenditures in their CIT or PIT return.
  9. The taxpayer itemizes the expenditures by type in schedule CIT-BR or PIT-BR to the annual return.

You cannot claim the relief if:

  • You are an enterprise conducting R&D activity whose eligible expenditures have already been reimbursed in some other form, e.g. through grants, or were deducted from the tax base.

Why is it worth considering?

The chart below provides a sample calculation for a medium-sized enterprise developing computer software.
Estimated benefit over 5 years
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Our Offer

R&D audit
Implementation
Additional support
We will verify whether:
  • You qualify for R&D relief.
  • You are applying the correct accounting rules in the context of R&D relief.
  • You hold documents and designations for R&D activity.
  • You are subject to R&D reporting obligations.
  • You have an enterprise organizational structure for R&D resources.
  • You incur salaries and other categories of expenditures eligible for inclusion in R&D relief.
  • You use specialized equipment (and to what extent) for R&D activity.
  • You incur costs for expert opinions, advisory services and the like, including for acquisition of research results.
  • You use external R&D apparatus (and to what extent) for R&D activity.
  • You take depreciation of fixed assets or amortization of intangibles used to conduct R&D activity.
  • You have received state aid.
  • We will prepare recommendations for implementation of R&D relief.
  • Modify necessary formal legal documents, or draft them from the ground up.
  • Create a R&D project register.
  • Determine categories of costs and limits on deduction in the annual tax return.
  • Verify the correctness of calculation of the R&D relief or prepare calculations for the annual tax return.
  • Prepare schedule CIT-BR or PIT-BR.
We will provide support during:
  • Reporting activities involving R&D.
  • Tax audits or customs and treasury audits involving R&D.
  • Administrative court proceedings involving R&D (province administrative court, Supreme Administrative Court).

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FAQ

Does an employee’s salary when on holiday qualify for R&D relief?

An employee’s salary when on annual holiday, sick leave, or other justified absence should also be regarded as an eligible cost for R&D relief.

Can a partner in a partnership conducting R&D work benefit from R&D relief by deducting expenditures incurred by the partnership to this end from the partner’s own tax base?

Expenditures can be deducted pro rata to the partner’s share in the profit of the partnership.

How can eligible costs for R&D relief be carried forward to later tax years?

The regulations do not address how to carry forward eligible costs for R&D relief to future years. The taxpayer is thus free to make a division, in particular by applying pro rata the eligible costs in general and those associated with R&D centres.

Does a firm claiming R&D relief have an obligation to notify its R&D activity to the relevant tax authority?

During the course of the year, a taxpayer enjoying R&D relief need not inform the tax office that it is conducting such activity. Information on claiming the relief is included in the annual tax return.

Do works quality for R&D relief only if they lead to improvements in the activity of an external entity, such as a customer?

No, an organization can also conduct R&D work for its own use.

Examples of activities qualifying as R&D:

  • Work on new training methods
  • Work on new software, including new software on the scale of the enterprise (thus also on analogues, e.g. games offered by competitors)
  • Creative work on technology for a specific customer order
  • Work on compatibility of software with new platforms
  • Work on software to be used for the enterprise’s own needs.
What eligible costs can the taxpayer deduct from its tax base?

A fixed catalogue of eligible costs is set forth in Art. 18d of the Corporate Income Tax Act or Art. 26e of the Personal Income Tax Act. These costs are essentially expenditures aimed at financing the appropriate infrastructure, specialized personnel, IP rights, and other processes, as well as expenditures related to the conduct of R&D activity broadly.

What additional benefits can be obtained by taxpayers holding the status of an R&D centre?

Taxpayers with the status of an R&D centre have greater benefits in the event of claiming R&D relief. One of them is the possibility to recognize additional costs as eligible expenditures, e.g. depreciation of buildings, other structures, and separately owned premises, used to conduct R&D activity, and costs of expert opinions, advisory services, and the like obtained from entities other than scientific institutions.

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Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

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Pursuant to the Personal Data Protection Act of 29 August 1997 (Journal of Laws Dz.U. 2016 item 922, as amended), I consent to receive commercial and marketing information from KR Group sp. z o.o. sp. k. with its registered office at ul. Skaryszewska 7, 03-802 Warsaw, and to introduction into the database and processing by KR Group sp. z o.o. sp. k. of my personal data provided in this form. I also acknowledge that my consent is voluntary and that I have the right to review, correct or remove my data.

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