Tax benefits and discounts in Poland: How to optimize the tax burden?

The Polish tax system provides for a variety of benefits and discounts that allow entrepreneurs to optimize their tax burden and reduce costs. An important advantage of these benefits is their availability for small and medium-sized businesses, as well as for companies investing in innovation and development. In this article, we will consider the main ways to reduce the tax burden in Poland, what tools are available to entrepreneurs and what conditions must be met to receive tax rebates.

Benefits for research and development (R&D)

One of the main tax benefits in Poland is the research and development (R&D) tax credit. This benefit allows companies to deduct additional costs of innovative projects from their taxable income.

Terms and amount of the benefit:

• Additional deductions: companies can deduct from 100% to 200% of the costs associated with R&D activities. This means that an entrepreneur can write off twice the amount actually spent.
• Types of expenses: researchers’ salaries, costs of materials, equipment and patents, as well as other expenses related to research activities.
• Application: this benefit applies to companies of any size engaged in innovative activities.

It is a profitable way to reduce the tax burden for companies that actively invest in technology and innovation.

Benefits for new companies – “Tax holidays”

There are special benefits for newly established companies in Poland that help them reduce costs in the first years of operation. The most popular tax breaks for startups include:

• ZUS discount: new entrepreneurs can take advantage of a discount on social security contributions during the first two years of operation, which can significantly reduce the cost of social security payments.
• Ulga na start: in the first 6 months, new entrepreneurs can be exempt from certain social contributions, which significantly reduces the tax burden.

These tax holidays allow businesses to focus more on development and invest in growth without significant tax pressure in the early stages.

“Estonian CIT – Tax system for reinvested profits

The Estonian CIT model in Poland (also known as the “Estonian CIT”) is a new way of taxation that allows companies to postpone paying income tax until it is actually distributed to shareholders. It is especially beneficial for businesses that reinvest their profits.

Main features:

• Deferred tax payment: income tax is paid only when it is distributed among the company’s owners.
• Stimulation of reinvestment: companies that keep their profits in the business for further development have a lower tax burden.
• Rate: The basic tax rate under the Estonian CIT for small businesses is 9%, and for large businesses it is 19%.

This system allows companies to allocate more resources to business expansion and development by postponing tax payments.

Tax benefits for depreciation of property

Depreciation is the process of gradually writing off the value of fixed assets (such as equipment, machinery, buildings) used in business activities. The Polish tax system provides for preferential conditions for depreciation, which allow for a reduction in the tax burden.

Key aspects:

• Accelerated depreciation: certain types of equipment can be depreciated according to an accelerated scheme, which allows for a faster reduction of the tax base.
• One-time depreciation: for some small businesses, it is possible to write off the cost of assets immediately after their acquisition.

Depreciation is an effective tool for reducing tax costs for companies that invest in new technologies and equipment.

Discounts for internet and employee training

In Poland, there are also tax rebates for expenses related to the Internet and employee training. This is especially useful for companies that invest in competence development and professional development.

Terms and amount of discounts:

• Internet discount: the costs of connecting to and paying for the Internet can be deducted from the tax base, which allows for a slight reduction in taxes.
• Employee education and training: The costs of training courses and workshops for employees can be written off as deductible expenses.

These deductions allow businesses to improve their workforce and ensure efficient operations while reducing their tax burden.

VAT refunds for exporters and companies operating in the EU

Companies that export or operate within the European Union can benefit from a reduction in the VAT rate to 0%. This means that such companies are entitled to a refund of VAT paid on the purchase of export-related goods or services.

The VAT refund procedure:

• Deadlines for filing applications: companies can usually file for VAT refunds within 25-60 days after the transactions are made.
• Reporting: Companies are required to submit detailed reports through the JPK_VAT system, which provides automated verification of transactions and calculations.

This tool allows companies to reduce VAT costs and use additional funds for further development.

Tax benefits in special economic zones (SEZs)

Poland has a number of special economic zones (SEZs) in which companies can benefit from tax incentives if they invest in these territories. The main advantages of working in SEZs:

• Exemption from CIT for a certain period: companies investing in SEZs may be exempt from corporate income tax for up to 15 years.
• Additional discounts: in some cases, companies can receive tax holidays for a period of 5 to 15 years, which significantly reduces the tax burden.

This benefit is an effective incentive for foreign and domestic investors seeking to develop business in regions with lower economic potential.

Tax benefits as a tool for optimizing the tax burden

Tax incentives and discounts in Poland are an important tool for optimizing the tax burden, allowing companies to plan their expenses more efficiently and invest more in development. The use of research and development incentives, accelerated depreciation, tax holidays and other available tools can help reduce tax costs and ensure sustainable business growth. In order to receive these benefits, it is important to understand the requirements and consult with tax professionals regularly to make the best use of the available opportunities.