Discounts for innovation in the Polish Order

The Ministry of Finance has presented a draft law implementing the assumptions of the so-called Polish Order. The proposed regulations include, among others, many tax reliefs for innovative enterprises. IT companies will also be able to take advantage of at least some of them.

R&D relief and IP Box

According to the proposed changes, enterprises taking advantage of the R&D relief will be able to deduct 200% of the costs of salaries of employees and partners, including social security contributions. Additionally, taxpayers will be able to take advantage of the R&D tax relief and the IP Box at the same time, which previously was not possible. What does it mean for entrepreneurs? For those who benefit from the preferential 5% tax rate on income derived from qualified intellectual property rights? The possibility of parallel deduction of tax-deductible expenses under the R&D relief.

Deduction for support of innovative employees

The taxpayers who made a loss in a tax year or whose income was lower than the amount of their deduction under the R&D tax relief will be able to reduce the amount of their employees’ advance income tax payments by the value of the unused R&D tax relief. However, the proposed regulations will only apply to employees who allocate at least 50% of their time to R&D activities.

Prototype relief

The draft act provides for the introduction of the so-called prototype relief. It will allow to include expenses incurred on the creation and testing of a product prototype to the tax-deductible costs. In addition, taxpayers will be able to deduct from their tax base an amount equal to 30% of the costs of trial production of a new product and its market launch. However, the amount of the deduction cannot exceed 10% of the entrepreneur’s income in a given tax year.

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