The research and development (R&D) relief is one of the most generous preferences in the Polish tax system — and at the same time one of the least used by small companies. Many entrepreneurs assume that "research and development" is the domain of laboratories and corporations. Meanwhile, the relief is used by programmers building new applications, manufacturers improving recipes, and even construction companies developing their own technical solutions. Check whether your company can pay lower tax too.

How does the R&D relief work?

The mechanism is simple: you deduct R&D costs twice. First you recognise them as ordinary tax-deductible costs (like any other business expense), and then you additionally deduct them from the tax base in your annual return:

  • 100% of qualified costs — the standard deduction for most expense categories,
  • 200% of salary costs of employees and contractors involved in R&D work — since 2022 available to all taxpayers.

In practice this means that every zloty spent on the salaries of a team working on a new product reduces the tax base as much as three times: once as a regular cost and twice as a deduction under the relief.

Who can use the relief?

The R&D relief is available to PIT taxpayers settling under the tax scale or the flat tax, and to CIT taxpayers. You cannot use it on the lump sum on registered revenue — the lump sum has no concept of costs, so there is nothing to deduct. The relief is also unavailable to companies on the Estonian CIT, which follows its own rules.

You do not need to run a laboratory or employ scientists. It is enough that you carry out development works: creative activity undertaken systematically to create new or improved products, processes or services — using available knowledge. The key point is that the result must be new at the scale of your company, not the world. Examples:

  • a software house creating new application features or its own tools,
  • a food producer developing a new recipe or a more efficient production process,
  • an engineering company designing prototypes and technical solutions to order,
  • an e-commerce business building its own recommendation engine or logistics automation.

Routine, periodic changes (e.g. updating a software version without new features) do not qualify.

Which costs can be deducted?

The catalogue of qualified costs is closed. The most important items:

  • salaries under employment, mandate and specific-work contracts together with employer-financed ZUS contributions — in the proportion corresponding to time spent on R&D (200% deduction),
  • materials and raw materials directly related to R&D work (e.g. components for prototypes),
  • specialist equipment that is not a fixed asset, and depreciation write-offs on fixed assets and intangibles used in R&D,
  • expert opinions and advisory services purchased from universities and research institutes,
  • paid use of scientific research equipment.

Note: costs reimbursed through grants cannot be deducted — the relief applies only to expenses paid out of your own pocket.

How to claim the R&D relief step by step

  1. Identify your R&D projects — describe what you are creating, what problem you are solving and what is new at the scale of your company.
  2. Keep records of qualified costs — in the KPiR or accounting books you must separate R&D costs; for salaries, records of time spent on projects are essential.
  3. Collect documentation — project descriptions, schedules, results. This is your shield in case of an audit.
  4. Deduct the relief in the annual return — by filing the PIT/BR attachment (for PIT) or CIT/BR (for CIT) with your return.
  5. Carry unused relief forward — if you closed the year with a loss or your income was too low, you can deduct it over the next 6 years.

R&D relief and IP Box — they can be combined

Since 2022 the regulations allow you to combine the R&D relief with the IP Box relief for the same income. You first deduct the qualified R&D costs, and then apply the 5% IP Box rate to the remaining income from qualified intellectual property rights. For technology companies — especially in the IT industry — this is a very attractive combination.

Example

A limited liability company developing software employs two programmers (salary cost with surcharges: PLN 300,000 per year) who spend 80% of their time developing a new product. The qualified salary costs amount to PLN 240,000.

  • These costs normally reduce income — saving at 19% CIT: PLN 45,600.
  • Additionally, under the R&D relief the company deducts 200% × PLN 240,000 = PLN 480,000 from the tax base — an additional saving of PLN 91,200.

In total the company pays PLN 136,800 less tax per year — solely thanks to properly documenting work it carries out anyway.

What to keep in mind

  • Systematic work and documentation matter more than the scale of the projects — even a small company with a single development project can use the relief.
  • If in doubt whether your activity meets the R&D definition, you can request an individual tax ruling from the National Tax Information service.
  • The relief can also be claimed retroactively — by correcting returns for previous years (within the limitation period).

Wondering whether your projects qualify for the R&D relief and how much you could save? Contact LinTax — we will analyse your activity and help you implement the relief safely.