New tax incentives for innovative companies in Poland

January 2017 is the first month of functioning of a new act on innovativeness (the so-called “small act on innovativeness”). Ministries of Development and of Science and Higher Education have joint their efforts to make investment in new technologies in Poland easier and more attractive than ever before. The new legal act introduces some very promising opportunities from the point of view of those interested in research and development in their companies in Poland.

The government prepared a big shift when it comes to tax-deductible costs. Before 2017, they could constitute only 30 percent of the qualified costs of R&D operations. Officials came into conclusion this is clearly not enough. From January, companies investing in Poland will be allowed to deduct as much as 50 percent of their costs. The amount decreases the basis for calculating corporate income tax, thanks to which tax obligations of innovative companies may go down.

The incentive is related to innovative research and development activity that is carried out on an ongoing basis and knowledge obtained in consequence of this activity and used for introducing new solutions and uses. This refers to personnel costs. But labour expenses are not all types of costs mentioned in the innovativeness act. Materials, consulting, experts’ opinion, use of equipment, costs of obtaining a patent and related rights and amortisation are also regarded as qualified costs.

This is not the end of good news. Polish government decided to get rid of the income tax on intellectual and industrial property brought to a company. The time limit for deducting costs of research and development will be extended from three to six years. Deputy Prime Minister Jarosław Gowin expressed an opinion the changes will bring a noticeable increase in innovativeness of the entire Polish economy.

The Ministry of Development is working on another legal act concerning innovation. The so-called “big act on innovativeness” will be ready this year and is planned to come into force in January 2018.