Tax relief for research and development activity (R&D)

« News 09 july 2019

Tax relief for research and development activity (the so-called R&D relief) is a relief allowing to reduce the tax base for eligible costs incurred for research and development activity.

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If you would like to use the R&D relief, your company should conduct research and development activity, i.e. your activity:

  • is taken in order to acquire a new knowledge or to use of knowledge resources for the creation of new uses;
  • has a creative character and is taken in a systematical manner;
  • covers research and development works.

What is the amount of relief?

From 2018, the tax relief allows deduction from the tax base even up to 100%[1] of the costs incurred for research and development activity[2].

How does it work?

The entities conducting research and development activity may reduce the tax base (i.e. value from which the tax is calculated) by specific eligible costs incurred for such activity, i.e .:

  1. remuneration for work paid by your company, remuneration under the contract of mandate or contract for specific work, including your contributions under these contracts;
  2. costs of purchasing materials, raw materials, specialist equipment, services consisting in the possibility of using scientific and research equipment;
  3. costs incurred for ordered expertise, opinions, advisory services and other such services provided by universities and research institutes;
  4. costs of obtaining and maintaining a patent, protection right for a utility model, rights from registration of an industrial design;
  5. depreciation write-offs on fixed assets and intangible assets.

 

Summary

If your company conducts research and development activity and in conntection with such activity you:

  1. employ employees or co-workers;
  2. purchase materials, raw materials, specialist equipment or services for the use of scientific and research equipment;
  3. order expert opinions, opinions and advisory services from universities and research institutes;
  4. bear the costs of obtaining and maintaining a patent, a protection right for a utility model, the right from registration of an industrial design;

you potentially qualify for the possibility of using the R&D relief.

 

If you are interested in taking advantage of the relief, you need additional information on this subject or a practical explanation, please contact us (our contact details can be found here: https://www.esb-legal.pl/en/contact) - we'll be happy to help you.

9th July, 2019, attorney-at-law Magdalena Piechowicz

 


[1] For entrepreneurs that are not research and development centers (in the case of R&D centers, up to 150% of costs incurred for research and development).

[2] However, the amount of the deduction may not exceed the amount of income obtained by the taxpayer from income other than income from capital gains in a given tax year.

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