Among the tax incentives available to businesses, the robotisation tax relief remains one of the instruments supporting investment in new technologies, process automation and increased business efficiency. Although it has been part of the Polish tax system for several years, it continues to be one of the most interesting incentives supporting investment in process automation and the implementation of modern technologies.
The rules governing the robotisation tax relief are currently set out in Article 38eb of the Corporate Income Tax Act and Article 52jb of the Personal Income Tax Act. The incentive allows taxpayers to make an additional deduction from the tax base in respect of part of the costs incurred on robotisation, independently of the standard recognition of those expenses as tax-deductible costs. The significance of the relief may increase further following the recent publication of government Bill UD461 amending the Personal Income Tax Act, the Corporate Income Tax Act and the Lump-Sum Income Tax Act. The Bill proposes extending the availability of the relief for another ten years. Under the proposal, businesses could benefit from the relief until the end of the tax year commencing in 2036. The Bill also provides for clarification of selected rules governing the relief, including the treatment of qualifying costs connected with the depreciation of fixed assets. It is therefore worth revisiting how the robotisation tax relief works, who may benefit from it and what changes are proposed under the current Bill.
How does the robotisation tax relief work?
The robotisation tax relief was introduced to support businesses investing in automation and modern technological solutions. Under the relief mechanism, a business first recognises expenditure connected with robotisation as tax-deductible costs in accordance with the rules applicable to its business activity. In the case of fixed assets, this may take place, for example, through depreciation charges recognised as tax-deductible costs. The taxpayer may then make an additional deduction from the tax base equal to 50% of qualifying robotisation costs. As a result, certain expenditure connected with robotisation may be recognised for tax purposes more broadly than under the standard rules governing tax-deductible costs.
Example
A business recognises a qualifying robotisation cost of PLN 100,000 in a given tax year:
- PLN 100,000 is recognised as a tax-deductible cost in accordance with the applicable rules,
- the business may additionally deduct PLN 50,000 from its tax base under the robotisation tax relief.
The incentive therefore increases the tax value of the recognised cost beyond its nominal amount.
Who may benefit from the relief?
From the perspective of individuals carrying on a business activity, it is important to note that the relief is not intended solely for large corporate income taxpayers.
It may also be claimed by entrepreneurs whose business income is taxed:
- according to the progressive tax scale,
- at the flat-rate personal income tax rate.
How is the relief claimed?
Individuals carrying on business activity claim the deduction in:
- PIT-36, where their business income is taxed according to the progressive tax scale,
- PIT-36L, where their business income is subject to the flat-rate personal income tax.
The taxpayer also reports qualifying costs in the PIT-RB information form submitted in connection with the robotisation tax relief. Importantly, the relief is currently unavailable to entrepreneurs whose business income is taxed under the lump-sum tax on recorded revenue.
What expenditure may qualify?
The list of qualifying costs is relatively broad and is not limited solely to the acquisition of an industrial robot. It may include, among other items:
- industrial robots,
- peripheral machinery and equipment functionally connected with industrial robots,
- selected systems and equipment cooperating with industrial robots,
- specified intangible assets,
- training services connected with the implementation of robotisation,
- specified lease payments.
In practice, it is increasingly important to consider not only the acquisition of the robot itself but also the technological solution implemented by the business as a whole.
A robot does not necessarily mean a single robot
In recent years, questions have arisen regarding the scope of qualifying costs, particularly whether the relief may cover only an individual industrial robot or also other devices forming a functionally automated production line or system. It is increasingly emphasised that the purpose of the legislation, namely supporting the automation and modernisation of businesses, should be taken into account when assessing eligibility for the relief. As a result, the functional connection between individual devices and the robotisation process is becoming increasingly relevant, rather than merely the acquisition of an industrial robot itself. Businesses should therefore analyse their planned investment as a whole and assess its connection with the automation process.
What would Bill UD461 change?
The key proposal is to extend the availability of the robotisation tax relief for another ten years. Under the Bill, businesses would be able to benefit from the relief until the end of the tax year commencing in 2036.
The Bill also proposes:
- clarification of the treatment of depreciation charges as qualifying costs,
- removal of the DNSH, or Do No Significant Harm, clause previously linked to the implementation of selected objectives under Poland’s National Recovery Plan.
The proposed clarification is intended to reduce existing uncertainty as to whether, in the case of fixed assets and intangible assets, the qualifying cost should be their acquisition price or the depreciation charges recognised as tax-deductible costs in a given tax year. This issue has previously been subject to differing interpretations by taxpayers and the tax authorities. The Bill is intended to state explicitly that, in relation to depreciable assets, qualifying costs are the depreciation charges recognised as tax-deductible costs in the relevant tax year. The proposed changes are primarily intended to ensure the continued availability of the relief and increase taxpayers’ certainty as to the rules governing its application.
PwC commentary
The proposed extension of the robotisation tax relief may be seen as confirmation that the legislator continues to recognise the importance of investment in automation and modern technologies for business development and competitiveness. For taxpayers, the scope of the relief is not the only relevant factor. Greater predictability in investment planning may be equally important. Robotisation projects are often implemented over several years, which means that the stability of the tax environment may support investment decisions. If the proposed changes are enacted, businesses will gain a considerably longer horizon for planning investment in process automation and robotisation. For many businesses, this may be a relevant consideration when deciding whether to implement new technologies, particularly in an environment of rising labour costs and the need to increase operational efficiency. It should nevertheless be remembered that the Bill is currently progressing through the legislative process. Its final wording may still change. Even at this stage, however, it is clear that the robotisation tax relief remains an important tax instrument supporting businesses investing in modern technologies and the development of production processes.
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