What is IP Box?
IP Box gives the possibility to reduce even to 5% the income tax rate on revenue gained from intellectual property rights, depending on the actual R&D costs’ structure.
All taxable persons who benefit from the IP Box may use this tax preference till the expiration of the right, however, in case of the copyright to a computer software any registration is not demanded (the right is protected by law automatically).
Conditions for the application of the decreased tax rate
An usage of this preference is conditioned by leading an own R&D activity referring to development, production or improvement of the element of
the intellectual property, which could be proven by the tax payer with owned documentation.
Moreover, the condition for the usage of decreased tax rate is to identify an income tax according to the rate indicated in the accounting books (revenue and costs directly related to a given IP).
Additionally, it is necessary to comply with the criteria of several recording guidelines, such as indicating the historic costs of the right or potential guideline of the time evidence.
Conditions for the application of IP Box by the developers
According to the regulations, IT consultants intending to benefit from IP Box should as a rule:
- create a computer software under their own R&D activity,
- obtain the income from the disposal or licensing the software (or to its part),
- identify a revenue from the computer software in the accounting evidence.
Based on our experience, a key would be to analyze the agreements with the clients and also with the developers working on the B2B contracts in terms of a basis of mutual settlements and costs related to computer software.
It is recommended to pay attention in case of meeting the criteria of IB Box usage by the developers under the B2B contracts as it may restricts the possibility of IP Box usage and potential savings of the companies cooperating with self-employed developers.
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