IP Box Accounting
IP Box Accounting: IP Box relief is the preferential taxation of income derived from intellectual property (IP) rights. It is a special tax credit that allows a reduction in the tax rate to 5% for income from qualifying IP, such as patents, software copyrights, utility models and others.
IP Box relief – basic information
The IP Box relief introduces the possibility of taxing income derived from qualified IP rights at a rate of 5%, which is a significant relief compared to standard tax rates. In Poland, the basic corporate income tax rates are 19% or, in the case of small taxpayers, 9%. Thanks to the IP Box relief, entrepreneurs can significantly reduce their tax liabilities, which encourages investment in innovation and technological development.
Research and development activity and IP Box relief
Research and development (R&D) activity is a key requirement for benefiting from IP Box relief. R&D comprises research and development work that is systematically carried out with the aim of increasing the stock of knowledge and using it to create new products, processes or services. Entrepreneurs must demonstrate that their R&D activities have contributed to qualified IP, which requires appropriate documentation and accounting records.
Qualified IP in theory
Qualifying intellectual property (IP) rights are rights that have arisen as a result of research and development activities and that an entrepreneur can monetise. These include:
IP Box relief – eligible entities
Companies engaged in research and development activities that derive income from qualifying IP are eligible for IP Box relief. These can range from small and medium-sized companies to larger corporations. A prerequisite is that accounting records are kept that allow income to be clearly attributed to qualified IP.
Calculation of income from qualified IP
Income from qualified IP is calculated by determining the income derived from the IP, less the costs directly related to the production, development or improvement of that IP. The income earned is then taxed at the preferential rate of 5%. The key element is precise bookkeeping that allows the income from the qualified IP to be isolated.
How to document for the purposes of IP Box relief
In order to benefit from IP Box relief, it is necessary to keep detailed accounting records that clearly allocate income to qualifying IP. The records should include:
Obliczenie dochodu z kwalifikowanego IP
Various occupational groups can benefit from IP Box relief, including:
Summary of conditions
However, obtaining IP Box relief is subject to regulations. The most important requirements to be met include:
Our strengths:
Experience: We have many years of experience working with technology companies that benefit from the IP Box relief.
Regulatory knowledge: Our team is up to date with current legislation and interpretations regarding IP Box relief.
Multilingual team: we offer support in English, Russian and Ukrainian, which is particularly important for international companies.
Individual approach: We provide each client with an individual approach, tailored to their specific needs and requirements, allowing them to make the most of the available tax reliefs.
Tax advice: as tax advisors, we are qualified to advise on the choice of the correct flat rate on income.
Our accountancy firm offers a comprehensive accounting and advisory service for the use of IP Box relief, allowing technology and innovation companies to manage their finances effectively and increase the profitability of their projects. With our experience and expertise, companies can focus on developing innovative products and technologies, confident that their finances are in good hands.