Increased limits in R&D relief
The first major change applies to taxpayers with the status of research and development centres, which are (currently) allowed to deduct 150% of certain tax-deductible expenses. Under the modified R&D tax relief, those entities could deduct 200% of eligible costs, including eligible costs for obtaining and maintaining a patent.
Taxpayers without the status of R&D centres would also benefit from extension of the relief, as they would be able to deduct 200% of costs in the form of salaries of employees involved in R&D activities (instead of 100%).
The prototype relief, which will be complementary to the R&D relief, will allow taxpayers to deduct from the tax base an additional 30% of costs of trial production of new products or launching new products on the market.
This new relief is aimed at taxpayers that have created new product as a result of their R&D work, if the product has not yet functioned on the market and is distinguished for its technical efficiency, usability and functionality.
As with R&D relief, such costs would be claimed in the annual tax return for the tax year in which the costs were incurred. The other option would be to deduct the costs in the next two years following the year in which they were incurred. The value of the deduction could not exceed 30% of costs incurred or 10% of income from non-agricultural business activity.
Robotics tax relief
Another proposed solution is robotics relief. Robotics relief would allow taxpayers conducting industrial (or manufacturing) activities to deduct eligible costs, previously included in tax-deductible costs, from the tax base. However, the relief could not exceed deduction of 50% of eligible investment costs from the tax base.
Introduction of robotics relief is intended to encourage taxpayers to invest in industrial robots, machines or peripheral devices increasing the level of robotization and automation of Polish enterprises.
Simultaneous use of IP Box and R&D tax relief
So far, it has not been possible to apply R&D tax relief and the preferential IP Box tax rate to the same income at the same time. The Polish Deal would introduce a regulation enabling taxpayers earning income from qualified intellectual property rights to tax that income at the preferential 5% tax rate and also claim R&D tax relief at the same time. Applying both forms of relief simultaneously would deliver many benefits for innovative taxpayers.
Therefore, from 2022, taxpayer commercalizing the results of research and development, who obtains qualified income from them within the meaning of the IP Box provisions, will not be obligated to choose between the two reliefs.