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POLISH TAX RELIEF FOR NEW TECHNOLOGIES TO BE ABOLISHED SOON

2015-09-29

Pursuant to the statements made public by the representatives of the Polish Ministry of Finance, the tax relief for new technologies is soon to be abolished and possibly replaced by a new tax relief targeting the R&D expenses. Since the timeframes of introduction of the new tax relief and its details are still unknown, it is worth checking what the currently applicable Polish tax regulations may offer.

Tax relief for new technologies allows the taxpayers to use 50% of the expense on the purchase of the new technologies to reduce the tax burden in addition to the standard tax cost reported through depreciation write-offs. In other words, application of the tax relief for new technologies allows the taxpayer to save additional 9.5% of the expenses incurred on the purchase of  new technologies.

However, the tax relief for new technologies, though available already for several years, is still rather unpopular among the taxpayers (what also caused the Polish Ministry of Finance to discuss the reasonableness of such relief). The possible reason for the state of affairs may be the taxpayers’ conviction that the relief applies only to expenses incurred for extremely advanced technologies, infrequently used by the Polish taxpayers and that the application of the tax relief is connected with the necessity to complete substantial paperwork (including the necessity to obtain the required opinions of R&D entity).

However, the practice of applying the tax relief for new technologies, confirmed by the interpretations issued by the tax authorities, indicates that certain technologies, mainly software, commonly used by the taxpayers may also be classified as new technologies. The tax authorities recently mentioned such examples of technologies giving right to benefit from the tax relief as the licenses for ERP systems (ruling of the Head of the Tax Office in Poznań dated 15th December 2014, file Ref. No. ILPB4/423-447/14-4/ŁM), or banking process service systems (ruling of the Head of the Tax Chamber in Poznań dated 19th December 2013, file Ref. No. ILPB4/423-174/13-4/DS). Also R&D entities are well prepared to issue opinions on new technologies as required by the Polish tax regulations.

The accessibility of the tax relief for new technologies could be further enhanced by the software suppliers that could include the whole package of the paperwork (opinions of R&D entities, template of application for tax ruling, etc.) in their offer.

It is worth noting that the tax relief for new technologies may be applied also to the expenses already incurred by the taxpayer, provided that the expenses are not barred by limitation.

Therefore, apart from the proper planning of expenses for new technologies, the entrepreneurs have an opportunity to make some tax savings by the review of the already made expenses on the purchase of software or advanced devices to check whether the tax relief for new technologies may be applied.

Detailed rules of applying the tax relief for new technologies are regulated in Article 18b of the Corporate Income Tax Act, and Article 26c of the Personal Income Tax Act.

Related People: Tomasz Rysiak, Agnieszka Pytlas-Skwierczyńska
Related Service Areas: Tax
Related Countries: Poland

 

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