IP Box boosts R&D, SoftDev, other hi-tech sectors

The IP Box was introduced in 2019 to stimulate the market for new technologies and innovative solutions. KR Group has just published the first comprehensive report on tax incentives of Innovation Box.

Is the scheme fulfilling its aims? KR Group is launching a debate on innovation in Poland, drawing on numerous qualitative studies and detailed data compiled for the first time from the Ministry of Finance and individual tax interpretations from the National Revenue Information System. The study examines entities from the IT, ICT, game development, biotechnology, pharmaceutical, industry and healthcare sectors.

Among the guests featured in the report are the CEO of the Warsaw Stock Exchange, experts from the National Centre for Research and Development, foreign entrepreneurs, and strategic advisers.

IP Box for personal income tax payers from the IT sector

In its first year of operation, relief under the IP Box was claimed by nearly 2,000 taxpayers, over 75% of whom were commercializing rights to software. Micro-enterprises operating individual businesses responded fastest to introduction of the scheme, constituting 97% of taxpayers claiming the IP Box in 2019, far outpacing payers of corporate income tax, who accounted for 3%.

The ranks of dormant beneficiaries are mostly made up of entities from the sectors of biotechnology, pharmaceuticals, industry and healthcare, although the catalogue of eligible intellectual property rights entitles them to take advantage of the Innovation Box.

After two years of functioning of the IP Box in Poland, KR Group shares the numbers and answers to key questions, while assessing whether the scheme may be displaced by other tax preferences.

“We have also learned what should be done to facilitate exercise of this incentive by payers of CIT and PIT,” said Kacper Kosowicz, Development Director at KR Group. “With this report, we are initiating a debate on this topic. And there’s a lot to discuss. From an analysis of the data, trends and forecasts, we can estimate that the time for unleashing the potential of the IP Box will fall in financial year 2021–2022.”

Report in a nutshell

The report includes a comparison of the IP Box relief with R&D relief, “Estonian CIT,” and the planned tax incentive for robotics. Our publication also answers the following questions:

  • Poland as part of Europe—is it an innovative country yet or still playing catch-up?
  • Taxpayers’ concerns about the IP Box? Three main attitudes
  • What are the disproportions between PIT and CIT payers?
  • Who are the largest beneficiaries of the IP Box by sector?
  • How to unleash the hidden potential of the IP Box among dormant beneficiaries?

KR Group is a rapidly growing Polish-based accounting and tax group, with locations in Czechia, Hungary, Poland and Romania. Since 2000 the company has built a strong position in the market for accounting, tax, audit, HR and payroll services.

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