Poland plans enhanced R&D, innovation tax incentives

The Polish Ministry of Finance on May 24 announced details of its tax plan for boosting innovation in Poland, including enhancements to the research and development (R&D) credit, increased deductions for costs related to prototypes and robotics, and IP Box.

Through the plan, Poland seeks to have in place a comprehensive system of tax incentives to support innovation and economic development in Poland from the beginning of 2022. The Ministry of Finance said that most of the proposed rules are or will be opened for consultation next week.

Starting in January, the Ministry said, the plan would enable companies to combine the R&D tax credit with the intellectual property (IP) box regime. Under current law, businesses that commercialize the results of their R&D and benefit from preferential rates on associated income under the IP box regime are not able to deduct associated eligible costs under the R&D allowance.

With respect to prototype development, the plan would allow businesses to deduct from their tax base an additional 30% of the expenses incurred in the production of a prototype (capped at 10% of income). To assist compliance, the Ministry said the proposed rules would include a precise list of qualifying expenditures.

For companies that want to improve production through robotics, the plan would make it possible to deduct an additional 50% of the cost of purchasing a robot, installing it, purchasing associated software, and training employees. Thus, 150% of such costs would be deductible.

Finally, the plan would include new relief for costs related to the employment of innovative workers, including researchers, programmers, inventors, and engineers. The relief would be linked to the cost of the employment, so businesses would be able to benefit from it even if they do not currently have taxable income.  


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