What changes?

Until the end of 2021 the product innovation process was supported at the stage of development works (R&D relief) and commercialization (IP Box) only. As a rule, the stage between was not included. Relief for prototype shall fill this gap. 

The relief provides for possibility to deduct from tax base additional 30% of costs incurred for trial production of new product and its introduction to market (no more than 10% of income). 

For the purposes of the relief, product shall be understood as tangible current asset in the form of finished product developed or processed by an entity (except from services).  

The trial production should be understood as the stage of technological start-up that does not require further design, construction or engineering works, the purpose of which is to perform trials and tests before launching the production of a new product. The introduction of a new product to the market is understood as activities undertaken in order to prepare necessary documentation to obtain certificates and permits enabling the sale of the product. 

In its structure, this relief is similar to the existing R&D relief, however, it provides for a different catalog of eligible costs, namely in case of trial production: 

In case of introduction of new product to market the eligible costs are as follows: 

The relief for prototype is a permanent solution. 

What does it mean?

In practice, it is difficult to define the line between eligible costs for the purposes of R&D relief and the relief for prototype. Nonetheless, the relief for prototype provides for sort of extension of R&D relief eligible costs.  

Eligible costs within the prototype tax relief affect (reduce) tax result by 130% (compared to current 100%), however, additional deduction cannot exceed 10% of taxpayer’s income from sources other than capital gains. The relief applies to expenses incurred since 2022. 

How can we help you?

  • analysis of the relief potential; 
  • preparation of tax evidence and project documentation; 
  • calculation of the relief; 
  • trainings for employees on the relief assumptions; 
  • application for a tax ruling; 
  • ongoing tax advisory; 
  • tax litigation. 

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