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GI Alert: Doubled benefit in the R&D tax relief from 2018 – a greater incentive for entrepreneurs
Doubled benefit in the R&D tax relief from 2018
The second act on innovation was signed by the President of Poland – starting from 2018 entrepreneurs will be given the opportunity of an increased deduction of 38 PLN from each 100 PLN spent on R&D works. This results in a reduction of CIT payables.
The second act on innovation was signed by the President of Poland – starting from 2018 entrepreneurs will be given the opportunity of an increased deduction of 38 PLN from each 100 PLN spent on R&D works. This results in a reduction of CIT payables.
R&D tax relief – increased benefits
The act provides for a significant increase in the bonus in the form of an additional deduction of eligible costs from the tax base amounting to:
- 100 percent for all categories of eligible costs for all enterprises (for 2017 this was set at 50 percent for SMEs and at 30-50 percent for large enterprises);
- 150 percent for all categories of eligible costs for taxpayers having the status of a research and development center (R&D Center).
Examples of the benefits that the relief can bring in a five-year period:
Extension and clarification of the catalogue of eligible costs
The act extends and clarifies the catalogue of eligible costs, including:
- employee salaries will be eligible for the relief in the part relating to R&D activity (elimination of the “employment for the purpose of…” provision which has been a source of interpretative uncertainties);
- remuneration of individuals engaged in R&D activities under service or specific task contracts was included in the catalogue of eligible costs;
- new categories of eligible costs have been added:
- the purchase of specialized R&D equipment, which is not a fixed asset,
- the purchase of services enabling the use of research equipment for R&D,
- costs of R&D carried forward as an intangible asset.
Additional benefits for R&D Centers
Taxpayers having the status of an R&D Center will receive additional benefits in the form of:
- increased bonus – 150 percent of eligible costs;
- expanded catalogue of eligible costs:
- depreciation of structures, buildings and premises constituting a separate property, used in R&D activities,
- studies, opinions, consulting and equivalent services, researches, technical knowledge and patents or licenses for protected inventions purchased from entities other than scientific units.
- possibility of obtaining a CBR status for entities earning revenues of PLN 2.5 million or more.
Other, selected amendments introduced by the act
- enabling R&D tax relief for taxpayers with permission to operate in a SEZ;
- extending the tax exemption of companies whose sole business consists of financial investment activities, for income from the sale of shares in entities conducting R&D, purchased between 2016 and 2023;
- facilitating the development of scientific careers, combined with the development and implementation of commercial solutions in enterprises – this change is intended to encourage scientists and companies to increase cooperation.
How can we help?
The Grants & Incentives team at KPMG is part of the international KPMG R&D Incentives Network. Our experts have many years of experience in identifying and applying for grants and claiming incentives for R&D worldwide.
We offer a fully comprehensive approach enabling companies to benefit from the new tax relief for R&D:
- assistance in obtaining the status of an R&D Center;
- mapping the operations and costs eligible for deduction;
- assistance in the process of accounting separation of eligible costs;
- calculation of the R&D tax relief amount;
- preparation of the annual R&D report and filing of the R&D declaration;
- assistance in adjusting the company’s organizational, legal and accounting processes for the effective use of incentives.
Our many years of experience in claiming support for R&D projects and cooperation with scientific and technical experts offers our customers an efficient service for claiming tax relief for R&D.
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