IP Box

Starting from January 1, 2019, revenues from business use of intellectual property rights (IP) generated, developed or improved as a result of research and development (R&D) or acquisition of R&D services are subject to taxation with a preferential 5% CIT/PIT rate.

Regulations regarding IP Box are to be an incentive for taxpayers conducting R&D activity, and at the same time do not exclude the possibility of using the R&D relief. The IP Box incentive has been implemented and operates in other countries, including Slovakia, the United Kingdom, the Netherlands and Luxembourg.

The reduced tax rate will apply to income from the following qualified intellectual property rights:

• rights to the invention (patents) and additional protection rights for the invention,
• protective rights for the utility model,
• rights from the registration of an industrial design,
• rights from registration of the integrated circuit topography,
• additional protection rights for a patent for a medicinal product or plant protection product,
• the registration of the medicinal and veterinary product authorized for trading,
• rights from registration of new plant varieties and animal breeds,
• rights to a computer program.

In order to benefit from the reduced tax rate, these rights must be subject to legal protection under the provisions of separate acts or ratified international agreements to which Poland is a party or other international agreements to which the European Union is a party. It is possible to apply the new provisions to the expectative of these IP rights in relation to application filed with the competent authority.

See also: IP Box for programmers

The taxable amount is the sum of qualified income from qualified IP rights derived in a given tax year. The amount of income from a qualified IP right, included in the tax base, is determined using the ratio calculated in accordance with a special formula included in the regulations (indicator calculated on the basis of eligible costs incurred).

The following are regarded as income from qualified IP rights:

• fees or receivables under a license agreement covering a qualified IP right,
• sales of qualified IP rights,
• qualified IP right included in the sale price of the product or service,
• compensation for infringement of rights resulting from a qualified IP right obtained in litigation, including court proceedings or arbitration.

Losses incurred from qualified IP rights may reduce income associated with the same qualified IP right or the same type of product or service to which the IP right is associated (during 5 consecutive tax years).