From January 1, 2019, onwards the IP BOX (Intellectual Property Box) relief is in force in the Polish tax system, available for selected taxpayers allowing them the application of a preferential 5% rate in the PIT and CIT income tax regimes, instead of the standard rate for incomes classified as incomes from intellectual property rights. This provides an excellent platform for tax optimization for IT developers working in the B2B business sphere.
IP Box is a preferential taxation of income from sales of products or services based on intellectual property rights. The solution is to increase attractiveness of conducting research and development activity in Poland. It is supposed to encourage entrepreneurs to more courageously search for business potential in intellectual property rights. In 2020, entrepreneurs can take advantage of the IP Box tax relief, which gives them the right to account for income earned in 2019. The IP Box preference is an arrangement that a taxpayer can take advantage of after the end of the tax year on their annual return.
Taxpayers who, as part of their business activities, produce and then commercialize computer programs, may tax (after meeting statutory conditions) the income obtained from the transfer of exclusive rights or the granting of licenses at a preferential 5% income tax rate.
As the subject of the IP BOX tax relief is the income from the commercialisation of a qualified intellectual property right (granting of a licence or sale of copyrights to a computer program). Remuneration for other technical activities not directly related to the creation of qualified IP does not constitute qualified income taxed at 5% rate (e.g. implementation of the program at the client‘s site, preparation of technical documentation, technical assistance, training etc.).
A taxpayer who wants to take advantage of the IP BOX income preference must keep detailed accounting records allowing for the link between a specific qualified intellectual property right and the income generated as a result of research and development works. It is worth pointing out that there is no set pattern for keeping such records. What is important is the ability to link revenues and costs with a specific software program.
If you have any additional questions regarding the above topic, please let your contact person know, who will forward your inquiry to the department:
Head of Customer Relationships
Department / Senior Manager
CUSTOMER RELATIONSHIPS DEPARTMENT
Our specialists are at your disposal. The contact form is available on the getsix website.