Tax savings thanks to R&D relief
The R&D tax relief means a CIT tax reduction of up to 38% – that’s why it’s worth doing R&D right here in Poland.
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What percentage of costs can be deducted in CIT thanks to R&D relief?
- 200% of the costs incurred for employee salaries (with employer markups),
- 100% of the costs of tangible and intangible assets used in R&D activities – costs of research outsourced to scientific units, materials and raw materials, cloud licenses necessary for development activities, costs of scientific apparatus, as well as costs of obtaining and maintaining patents
And there are no financial limits on any of the above cost categories!
As a result, each PLN 100,000 spent on R&D results in CIT savings of PLN 19-38,000 for the entrepreneur.
And what is it like abroad?
In the Czech Republic, for example, a maximum of 110% of costs can be deducted, while in France there is a monetary limit to the deduction – it is a maximum of €100 million, and above this value the tax relief is only 5%.
R&D relief is not only a retroactive deduction, but also a “tax shield” for the future
If your historical activity was R&D, your tax return can be adjusted up to five years back and include the unused relief. If, on your return, the relief is higher than your tax base or you recorded a loss, the unused deduction is not lost – it passes to be used in the next six tax years.
And what is it like abroad?
In Cyprus, for example, an unused deduction can be carried forward a maximum of four tax years.
How can we help you?
- We will conduct a preliminary analysis of the applicability of the relief and suggest a strategy for its use.
- We will conduct an audit of innovation activities.
- We will support comprehensively in the entire process of implementing the relief.
- We will prepare security documentation and applications for individual tax interpretation.
- We will support in the modification of internal processes to improve the settlement of innovation relief.
- We represent in audit proceedings regarding the settlement of reliefs.
Contact our experts now and find out how much you can save. Remember that relief applies up to 5 years back – it’s not worth waiting until the next accounting period!
Any questions?
What is the R&D relief and can everyone use it?
This is otherwise known as relief for research and development activities, which allows companies to reduce their taxes in exchange for conducting such activities. The R&D relief is available to all entrepreneurs, regardless of the size of the company and the industry in which they operate. This means that both micro-entrepreneurs and large corporations can benefit from it.
The deductible costs must be related to research and development activities, i.e. fit into its definition, which, fortunately for taxpayers, is very broad – innovation on the scale of a company, related, for example, to the development or improvement of the products offered, is sufficient. Standard business activities carried out on behalf of a customer often also fit into this definition. It is however obligatory to separate the costs in the records kept, since the relief is not deducted on a flat rate basis.
In our experience, relief does not result in a tax audit once these obligations have been met and standard verification measures have been taken.
And what is it like abroad?
E.g., when taking advantage of R&D relief in the Czech Republic, it is statutorily required to have detailed internal project documentation, confirming the R&D work carried out, i.e. reports, analyses, etc.
What are the benefits of using R&D relief?
The R&D relief entitles taxpayers to an additional deduction from the tax base of a portion of expenses incurred for research and development activities, previously counted as deductible expenses. Thanks to the relief, the development of business conducted in Poland may therefore involve not only an increase in the potential of the business conducted, but also an increase in the efficiency of tax settlements.
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