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This preference applies to qualified IPRs, which include a patent, the right of protection for a utility model, the right in registration of an industrial design, the right in registration of a topography of an integrated circuit, an additional right of protection for a patent for a medicinal product or a plant protection product, the right in registration of a medicinal product and a veterinary medicinal product allowed on the market, the exclusive right referred to in the Act of 26 June 2003 on legal protection of plant varieties, author’s right referred to in the Act of 27 June 2003 on the on legal protection of plant varieties, copyright to a computer programme – subject to legal protection under provisions of separate acts or ratified international agreements to which the Republic of Poland is a party, and other international agreements to which the EU is a party, the subject of protection of which was created, developed or improved by the taxpayer as part of his research and development activities.

Taxpayers wishing to take advantage of the IP Box relief should therefore consider whether they produce qualified IP in their start-ups and carry out R&D activities.

In the context of R&D activity, it should be noted that it is a creative activity involving scientific research or development, undertaken in a systematic manner in order to increase knowledge resources and to use knowledge resources to create new applications.

At the same time, the R&D activity qualifying for the relief should lead to the creation, development or improvement of qualified IP.

The IP Box relief may also be attractive from the perspective of start-ups just entering the market, as the tax act does not impose any additional requirements as to the type, scale or frequency of the activity.

However, it is worth remembering that for the purposes of applying the IP Box relief, taxpayers should keep records in order to be able to show in the annual tax return the total sum of revenues, tax costs, income, losses, income subject to taxation at the rate of 5%, and income that will not be subject to preferential taxation.

The tax regulations list the following in the catalogue of eligible costs entitling one to take advantage of the relief The tax regulations list among others remuneration of employees employed in order to conduct R&D activity, expenses for purchase of materials and raw materials directly connected with the conducted R&D activity, expenses for expert opinions, opinions, advisory services and equivalent services, as well as purchased results of scientific research provided or performed on the basis of a contract by a scientific unit for the needs of conducted R&D activity, or paid use of scientific and research equipment in R&D activity not resulting from a contract concluded with an entity related to the taxpayer.

Qualified costs determined in this manner may be deducted in the amount of 100% from the tax base, whereas in the case of taxpayers with the status of a research and development centre, the amount of the deduction may reach up to 150% of qualified costs.

The possibility to take advantage of the R&D preference depends on the fulfilment of the following premises, i.e. the taxpayer’s activity is subject to taxation in accordance with general principles or the flat tax, the costs of R&D activity are separated in accounting records, the qualified costs have not been returned in any form and the activity was not conducted in the territory of a special economic zone on the basis of a permit.

Importantly, the R&D tax relief is available to all entities carrying out scientific research or development work regardless of the nature of their activity. However, special attention should be paid to the R&D regulations introducing special regulations for entrepreneurs starting up their business.

If a newly established start-up incurred a loss in the year of commencement of its business activity or earned income lower than the amount of deduction due for that year, it is entitled to a refundable amount corresponding to the product of the non-deductible amount of qualified costs and the tax rate applicable in a given year.

The catalogue of qualified costs entitling to benefit from this preference includes in particular the costs of purchase of brand new industrial robots, machines and peripheral devices for industrial robots functionally related to them, machines, devices or systems for remote management, diagnosis, monitoring or servicing of industrial robots, in particular sensors and cameras, costs of purchase of intangible assets necessary for correct launch and commissioning of industrial robots and other fixed assets mentioned above, as well as costs of purchase of training services concerning industrial robots and other fixed assets or intangible assets.

The tax legislation further provides a definition of an industrial robot, which is an automatically controlled, programmable, multi-tasking and stationary or mobile machine, with at least 3 degrees of freedom, having manipulative or locomotory characteristics for industrial applications, which meets all the following conditions:

• it exchanges data in digital form with control and diagnostic or monitoring equipment for remote: control, programming, monitoring or diagnosis
• it is connected to information and communication systems improving the taxpayer’s production processes, in particular to production management, planning or product design systems
• is monitored by sensors, cameras or other similar devices
• is integrated with other machines in the taxpayer’s production cycle

The deduction of eligible costs related to an investment in robotisation applies to deductible costs incurred between 2022 and 2026.

The allowance for robotisation in its assumptions was based on the structure of the R&D allowance. Thus, the tax preference will be available to all PIT and CIT taxpayers, i.e. also start-ups, regardless of their size or industry sector, if they meet the statutory requirements.

Agata Żemełko, Legal Counsel | SDZLEGAL Schindhelm