Tax benefits for innovations, or how to use the research and development potential of your company

« News 12 april 2019

Tax relief for innovation is a system of discounts that allows you to achieve real financial benefits related to the company's research and development activity.


Tax regulations provide for a taxpayer two very interesting discounts:

  1. Innovation Box or IP Box - is a new relief introduced from January 1, 2019, which operates on the revenue side of the entrepreneur. It consists in the possibility of using a lower - 5% income tax rate for income derived from specific intellectual property rights;
  2. Relief R & D - is a benefit that was introduced in 2016, but not all entrepreneurs know it. This relief works on the cost side of the entrepreneur, i.e. it allows deduction of up to 100% of the costs incurred on research and development activities from the tax base.

Who can benefit from relief?

Discounts are directed to all entrepreneurs who conduct research and development.

Every entrepreneur, regardless of his business – i.e. a person running a sole proprietorship as well as a commercial law company - can take advantage of relief.

Discounts apply regardless of the industry in which the entrepreneur operates. Relief will find particular application in industries such as:

  1. IT – e.g. expenditures incurred on the development of new systems and programming languages, creation of new original encryption techniques, development of innovative techniques for game production;
  2. Pharmaceuticals and the market of medical devices – e.g. expenditures incurred on the development of new recipes, improvement of medical devices, organization and conduct of research works, optimization of the production procedure with new technological solutions;
  3. Finance and insurance – e.g. expenditures incurred on the development of new risk models for credit policy and consumer behavior testing techniques to create new financial products;
  4. Production – e.g. expenditures incurred on research on innovative technologies for machine production or optimization of the manufacturing process, work on the possibilities of using available materials and raw materials in a new, innovative way.

Thus, if within your company:

  • you gain new knowledge or use the knowledge gained so far in the work on creating new applications;
  • you conduct research and development work in this area as well as
  • you act in a creative and systematic way

you can - as an entity conducting research and development - be entitled to use the abovementioned relief, and consequently achieve real financial benefits for your company through:

  • applying a lower, 5% income tax rate for income derived from specific intellectual property rights;
  • deduction from the tax base even up to 100% of the costs incurred for research and development activities.

In the following articles, we will describe the principles of operation of each of the benefits - follow our articles in the “News” tab on our website (

11th April, 2019, attorney-at-law Magdalena Piechowicz

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