The Ministry of Finance has prepared a set of new regulations covering tax incentives for companies with research and development processes and extending the existing reliefs for entrepreneurs. According to Polski Ład (the Polish Deal) new instruments are to be introduced, such as a tax relief for innovative employees or a relief for a prototype, and the possibility of using the R&D and IP Box relief within the same income. The amount of possible benefits of the reliefs will depend on the size of the company. Another novelty is a proposal to increase the range of benefits resulting from the use of the already existing research and development tax relief. The proposed changes (presented on June 15th) apply to all entrepreneurs, regardless of the size of their business.
The new innovation package will enter into force at the beginning of 2022. In the case of R&D relief, taxpayers will be able to deduct the costs related to the salaries of employees / associates involved in R&D activities in the amount of as much as 200% (at this point it is 100%). Another important assumption in the draft changes within this relief, it will be possible to include all incurred costs by the R&D Center in R&D activities as qualified costs in the amount of 200%. The costs will also include expenses related to the receipt of a patent, protection right for a utility model or registration of an industrial design. Regarding the relief for innovative employees, no deduction limits are expected, and the activity of an engaged employee in R&D works, who will be accounted for the R&D relief from PIT advances, may not be less than 50%. A taxpayer wishing to use the prototype relief will have to conduct research and development work beforehand. The relief will not apply to the services sector, and its deductible value may not exceed 30% of the expenses incurred and may not exceed 10% of income. The prototype relief will apply to trial production, understood as the first stage of technological production, from testing and trials to the start of the official production, as well as the introduction of a new product to the market, under which, for example, the required documentation allowing for sale is acquired. Taxpayers who settle this type of costs under the existing PSI / SEZ (Polish Zone of Investment/ Special Economic Zone) exemption will not be able to use this relief for these specific costs.
In addition to the completely new reliefs for entrepreneurs, such reliefs are additionally announced:
-consolidation relief – relief for the merger of entities;
– an IPO relief – it would apply to the initial public offering for the sale of shares, as well as a relief for investments in stock exchange debutants, which is intended to support long-term capital investment on the public market,
– relief for those investing with Venture Capital funds – capital is invested in innovative enterprises,
– expansion relief – a form of tax incentive for entrepreneurs who want to operate on foreign markets.
Some of the above-mentioned reliefs have been on the market for several years, unfortunately less than 1% of taxpayers benefit from the IP Box relief itself, and less than 0.5% from the R&D relief. The planned changes are naturally another idea that will ultimately encourage companies to use the offered instruments.