Overview of the relief
The company Business Start provides legal and accounting services in Poland and explains how entrepreneurs and companies can benefit from the IP BOX tax relief (also ulga IP Box).
This mechanism allows the tax rate on income from intellectual property to be reduced to 5% for PIT and CIT payers.
The IP BOX program was introduced by the Polish government to stimulate research and development (R&D) and to support innovative business.
For example, if you work in IT and create software under your own name, you may apply the reduced tax rate to income from such intellectual property.
Who is eligible for the relief
- The relief is applied only in the annual tax return — during the year taxes are paid at standard rates.
- Income must be derived from registered and qualifying intellectual property.
- The relief is available to entrepreneurs taxed on the general or linear tax systems (PIT / CIT), but not to those taxed under ryczałt.
- It is necessary to conduct research or experimental development activity (R&D).
- You must keep separate records of income and expenses related to intellectual property.
Our firm Business Start helps clients prepare reports, calculate the tax base, and obtain individual tax rulings confirming eligibility for the relief.
Which intellectual property rights are included
Qualified types of IP include:
- patents;
- rights to utility models;
- rights to industrial designs;
- topographies of semiconductor products;
- pharmaceutical and veterinary products, plant protection products;
- copyrights to computer programs.
It is important that the intellectual property was created as a result of your research activity, and not purchased ready-made.
How to apply the IP BOX relief
1. Confirm R&D activity
You need to documentarily confirm that you conduct systematic and creative research or experimental development work.
2. Register or develop the IP right
You must be the rights holder of the intellectual property — whether a patent, a program, or another legally protected object.
3. Keep separate accounting records
Income and expense records for each IP object must be kept separately. This is a requirement of the Polish tax authorities.
4. Earn income from IP
Preferential income includes license payments, sale of rights, and also incorporating IP into the price of a product or service.
5. Declare the relief in the annual return
The relief is applied when filing the annual PIT or CIT return. Standard advance payments are made during the year, and adjustments are made at the end of the tax period.
