R&D Tax Relief

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R&D Tax Relief – How Companies Can Reduce Taxes and Benefit from Innovation
In Poland, every company paying income tax (PIT or CIT), regardless of its size or industry, can benefit from R&D tax relief. This is a tax preference that allows companies to deduct additional qualified costs incurred for innovative activities from their taxable base.

What is R&D Tax Relief?
The relief enables companies to:

  • reduce income tax in the current year,
  • decrease future tax advances,
  • recover overpaid tax even for the last five years.

Importantly, an R&D project does not need to succeed to qualify for the relief – it only needs to meet certain criteria.

What Activities Qualify as R&D?

  • Acquiring new knowledge – e.g., analyses, research, or tests.
  • Developing and improving – work on new products, services, or upgrades.
  • Implementing changes for greater efficiency – e.g., process automation, optimization, or quality improvements.

How to Settle the Relief?
The process involves several steps:

  1. Identification of R&D activities.
  2. Separation of qualified costs.
  3. Documentation of the work.
  4. Settlement of the relief in annual CIT/PIT.
  5. Possible verification by the tax office.

Case Study
A company incurred 800,000 PLN in qualified costs in one year. Thanks to the relief, it could additionally include 100% of these costs in its taxable base. With a 19% CIT rate, this translates into 152,000 PLN in tax savings.

Conclusion: R&D tax relief is one of the most effective tools supporting innovation i Polish companies. It allows not only to reduce tax liabilities but also to build a competitive advantage through the development of new technologies.

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