IP Box has been available since 1 January 2019. It is a preferential 5% CIT/PIT rate on a taxpayer’s income generated by commercialisation of eligible intellectual property rights.
In order to apply IP Box you need to meet 4 basic criteria:
- carry out R&D activities;
- cover the results of R&D activities with legal protection according to the list of eligible intellectual property rights. Those rights include e.g. patents, utility models, industrial designs, the right to register integrated circuit layout design, supplementary protection certificate for a medicinal product patent or a plant protection product, computer programme copyright;
- identify the costs of carried out R&D activities, which led to obtaining eligible intellectual property right by the entrepreneur;
- commercialise the eligible intellectual property rights, e.g. by selling eligible intellectual property rights or charging licence fees for them.
Using the IP Box incentive will only be possible after filing a request for legal protection with a competent body. In the case of withdrawing the request or getting refusal, the income generated in that period should be taxed according to general principles.
IP Box vs. R&D relief
IP Box and R&D relief supplement each other. The former includes preferential tax rate on income generated by commercialisation of intellectual property rights. They must be created, developed or enhanced through R&D activities carried out by the enterprise. R&D tax relief reduces the taxable amount with regards to carrying out R&D activities.
An entrepreneur planning to use IP Box will be obliged to keep accounting records allowing to define the revenues, tax deductible expenses and to define R&D costs assigned to a specific intellectual property right. Project-based approach to cost settlement makes a significant difference between R&D tax relief and IP Box. For the latter, it is necessary to keep detailed accounting records. In this way it is possible to show the relationship between tax incentive eligible income and the expenses incurred to obtain eligible intellectual property right.
Ayming Poland offers comprehensive support in using the IP Box incentive, which includes:
- obtaining legal protection of intellectual property, i.e. patent clearance analysis before starting a project, preparing complete documents required by institutions – application for intellectual property registration, substantive and legal support at the stage of granting legal protection, participation in possible proceedings related to infringement of intellectual property rights;
- determining the amount of income from eligible intellectual property right, including R&D costs;
- providing recommendations with regards to keeping accounting records of revenues and costs linked to eligible intellectual property rights;
- reviewing and providing recommendations with regards to internal documents that might have impact on the incentive;
- preparing appropriate statements for the Tax Office.