Combining the R&D relief and the IP Box in Poland

Combining the R&D relief with IP Box is permissible and does not require choosing one of the two preferences. Each concerns a different element of the tax settlement, because the research and development relief reduces the tax base by the costs of the work, while IP Box allows income from the commercialisation of the intellectual property right created to be taxed at a rate of 5%. In practice, therefore, the risk does not concern the right to combine the two solutions as such, but the quality of the documentation.

What does using the R&D relief and IP Box at the same time involve?

Applying the R&D relief and IP Box simultaneously means that the taxpayer deducts the eligible costs of research and development work and then applies the 5% rate to the income from the qualified intellectual property right created as a result of that work.

The difference comes down to what each of the preferences relates to. The R&D relief, governed by Article 18d of the CIT Act and Article 26e of the PIT Act, covers costs. IP Box, that is Article 24d of the CIT Act and Article 30ca of the PIT Act, covers income. The preferences therefore relate to two different stages of activity and do not overlap.

Since 1 January 2022, Article 24d(9a) of the CIT Act has additionally been in force, together with its counterpart in Article 30ca(9a) of the PIT Act. The provision allows eligible costs that led to the creation, development or improvement of a qualified right to be deducted from the income derived from that right. This is currently the strongest basis for combining the two solutions, because it follows directly from the statute and not solely from interpretation.

Who can combine the research and development relief with IP Box?

Both preferences are available to CIT and PIT taxpayers that carry on research and development activity and derive income from a qualified intellectual property right created within that activity. Legal form is irrelevant here, so this applies both to a limited liability company and to a sole proprietorship.

In practice they are most frequently used by IT companies and software houses, because copyright in a computer program falls within the statutory catalogue of qualified intellectual property rights. The situation is similar in the games industry, where the subject of development work may be both the first version of a product and its subsequent modules and functionalities.

Meeting the conditions for one of the preferences does not, however, determine that the conditions for the other are met. The authority assesses each of them separately, on the basis of a distinct set of criteria.

It is also worth monitoring changes in the legislation. Draft proposals restricting access to IP Box for the smallest taxpayers have appeared before, and their legislative fate has proved variable.

How, step by step, to account for R&D and IP Box in relation to a single project?

Accounting for both preferences within one project requires three steps performed in a specific order: identifying the R&D activity, calculating the eligible costs, and calculating the income covered by the 5% rate.

Step 1: Identifying R&D activity and the creation of qualified IP

The starting point is establishing that the work satisfies the statutory definition of research and development activity, that is that it is creative in nature and carried out systematically, and that its result is a qualified intellectual property right.

For technology companies this most often means a computer program as the qualified IP, protected by copyright. At this stage it is worth describing each project separately: what problem it solved, what the creative element consisted in, and what the result of the work was. Interpretative practice indicates that development activity does not end at the moment the first version of a product is created, and that its subsequent development stages may also satisfy the statutory criteria, provided they do not amount to routine and periodic changes.

Step 2: Calculating the eligible costs (R&D relief)

The second step is to establish which expenses fall within the catalogue of eligible costs set out in Article 18d(2)-(3) of the CIT Act. The catalogue is closed, so not every cost connected with the project is deductible.

The least doubt is usually raised by the remuneration of the persons carrying out the work, together with social security contributions, in the part corresponding to their involvement in R&D activity. More disputes concern indirect expenses. In the ruling of 23 September 2024 (ref. 0114-KDIP2-1.4010.344.2024.3.PP), the Director of the National Revenue Information Service confirmed the possibility of using both preferences while at the same time narrowing the catalogue of eligible costs, among other things in relation to part of the expenditure on a car, licences, subscriptions and accounting and advisory services.

Step 3: Calculating IP Box income taking the nexus ratio into account

The third step is to establish the income from the qualified right and multiply it by the nexus ratio. Nexus is a proportion showing what part of the work on a given right the taxpayer performed itself and what part it purchased from others. The more it did itself, the greater the part of the income that can be covered by the 5% rate.

The formula, set out in Article 24d(4) of the CIT Act, compares the costs of work carried out directly by the taxpayer with the costs outsourced to external entities and with expenditure on the purchase of a ready-made right. The last of these operates least favourably, and the result may not exceed 1. The calculation is carried out separately for each qualified right.

Financial benefits – by how much does the effective tax rate actually fall?

The IP Box preference reduces the rate from 19% or 9% to 5% in relation to qualified income. The actual effective tax rate depends, however, on what part of the income passes the nexus test, and not on the nominal difference between the rates.

The scale of the benefit therefore depends on the structure of the project. For a taxpayer carrying out work almost exclusively with its own team, the nexus ratio may be close to 1, in which case almost all of the income from the qualified right is subject to the 5% rate. For a taxpayer relying largely on subcontractors, only part of the income will be covered by the preference, and the remaining part will continue to be taxed under the general rules. By way of illustration: with a nexus ratio of 0.6 and a basic rate of 19%, the blended rate on income from the qualified right is 10.6%, because 60% of the income is subject to the 5% rate and the remaining 40% to the general rules.

Added to this is the effect of the R&D relief, which under Article 24d(9a) of the CIT Act may also reduce income taxed at the 5% rate. A separate issue remains capital groups covered by the global minimum tax, where the effective rate is determined at the level of the entire jurisdiction rather than of an individual company. The overall benefit therefore has to be calculated individually, on the data for the specific tax year.

The most common errors and risks in applying both preferences in parallel

The most common error is not the combination of the preferences itself, but treating remuneration for services as income from a qualified intellectual property right. The 5% rate applies solely to income from qualified IP, and not to the entire remuneration obtained in connection with research and development activity.

The order matters here. First a qualified right must come into existence, and then the taxpayer must derive income from that very right, in one of the forms indicated in the statute. This distinction was highlighted by the Provincial Administrative Court in Szczecin in its judgment of 25 February 2026 (ref. I SA/Sz 574/25).

The other typical risks are the incorrect allocation of costs to individual rights, errors in calculating the nexus ratio, and too broad an understanding of creative activity. A separate question, still giving rise to disputes, is the permissibility of recognising the same cost twice, that is in a deduction from income from qualified IP and, in parallel, from income taxed under the general rules. The tax authorities have approached this question differently from the administrative courts, which is why it is worth considering an application for an individual tax ruling in this respect.

How to prepare safe tax records for R&D and IP Box?

Safe records are records that make it possible to reconstruct the entire settlement path: from the specific work, through the costs, to the income allocated to an individual qualified right. Gaps in the records are the most frequent reason for a settlement being challenged.

In practice, the IP Box records and the R&D relief records should together demonstrate:

• which projects and tasks constituted research and development activity,
• which costs were recognised as eligible under the R&D relief,
• which qualified intellectual property rights arose as a result of that work,
• what revenues and costs are attributable to each of those rights,
• how the nexus ratio was calculated for each right.

The records are best kept on an ongoing basis, in parallel with the projects, rather than reconstructed after the end of the tax year. Reconstruction in hindsight is more difficult evidentially and usually no longer allows a missing description of the work to be supplied.

How ALTO Advisory supports the settlement of the R&D relief and IP Box in Poland

Combining both preferences is feasible, but each project and each qualified right has to be assessed separately. ALTO’s tax advisers help technology companies through this process: from a review of projects, through calculations, to the preparation of documentation.

It is worth turning to an adviser for support if:

• you are applying both preferences for the first time and want to confirm the classification of the work,
• part of the work is carried out by subcontractors or related entities, which affects the level of the nexus ratio,
• the settlement covers several qualified rights to which revenues and costs have to be allocated,
• the records were created late or do not cover all of the required elements,
• you are considering an application for an individual tax ruling on a question where the authorities’ practice is not uniform.

Sources

• Act of 15 February 1992 on Corporate Income Tax, Article 18d, Article 24d(4) and Article 24d(9a) (ISAP, isap.sejm.gov.pl).
• Act of 26 July 1991 on Personal Income Tax, Article 26e and Article 30ca(9a) (ISAP, isap.sejm.gov.pl).
• Individual tax ruling of the Director of the National Revenue Information Service of 23 September 2024, ref. 0114-KDIP2-1.4010.344.2024.3.PP (Eureka database, eureka.mf.gov.pl).
• Judgment of the Provincial Administrative Court in Szczecin of 25 February 2026, ref. I SA/Sz 574/25 (Central Database of Administrative Court Rulings, orzeczenia.nsa.gov.pl).