The IP BOX tax relief (IP: intellectual property ) is a tax benefit available to both self-employed programmers and software development companies. This relief allows for a preferential 5% income tax rate.
Conditions for applying the relief
A programmer can take advantage of this tax relief provided that their work can be considered research and development. This means that the relief is available to programmers who, in their work, strive to improve existing solutions based on knowledge derived from research and experience. The Ministry of Finance indicates that such work includes, for example, the creation of new operating systems or languages, the design and implementation of new search engines based on original technologies, efforts to resolve conflicts within hardware or software based on system or network reorganization, the creation of new or more efficient algorithms based on new techniques, and the creation of new and original encryption or security techniques. Therefore, in principle, all programmers who create computer programs based on innovative solutions are eligible for the relief. Income
from fees or charges arising from a license agreement or from the sale of software may benefit from the preferential tax rate (5%). Other income (e.g., from the provision of services) is subject to taxation according to general rules.
Assessment of qualifications for relief
To determine whether a given entity is eligible for the IP BOX tax relief, a thorough, individual taxpayer assessment is necessary. There is a risk that applying the preferential tax rate may be subject to review by tax authorities. Therefore, before applying the relief, we recommend verifying the entity's eligibility for the relief. It is also possible to apply to the Director of the National Tax Information Office for an individual interpretation.
Although the above conditions may seem complex, most companies operating in the software development industry can benefit from the relief.
How can we help?
- Development of a procedure for implementing IP BOX and legal support in implementing the procedure,
- Preparation of an application for an individual interpretation,
- Preparation of calculations, records and appropriate tax declarations or returns,
- Legal support in the process of protecting intellectual property rights (e.g. obtaining a patent).
