IP Box in Poland – How to Reduce Tax on Intellectual Property Income to Just 5%
If you earn income from software, patents, or other qualifying intellectual property in Poland, you may be able to reduce your tax rate to just 5% under the Polish IP Box regime. This powerful tax incentive rewards innovation and R&D activities, and it can be a game-changer for entrepreneurs, software developers, and companies in knowledge-based industries.
Our tax advisory team helps both Polish and foreign-owned businesses navigate the IP Box system, ensuring you get the benefits you’re entitled to while staying fully compliant with Polish tax law.
What is the IP Box?
The IP Box (Innovation Box) is a special tax regime introduced in Poland in 2019 under the Corporate Income Tax Act and the Personal Income Tax Act. It allows qualifying income from eligible intellectual property to be taxed at a preferential 5% rate instead of the standard rates (19% /9% CIT and 12%-32% PIT or 19% PIT).
The aim is to encourage innovation, R&D, and the development of new technologies in Poland.
Who Can Benefit from the IP Box?
You may qualify if you are:
- A software developer earning from licensing or selling software you have developed.
- An entrepreneur or company commercialising patents, industrial designs, or utility models.
- An R&D-focused business creating and exploiting new technologies.
- An expat running a Polish company in tech, engineering, life sciences, or creative industries.
What Qualifies as Intellectual Property?
The IP Box regime applies to income from qualifying IP rights that:
- Were created, developed, or improved through your own R&D activities.
- Are legally protected under Polish or international law.
Qualifying IP includes:
- Patents
- Copyrights to software
- Utility models
- Industrial designs
- Plant variety rights
- Topographies of integrated circuits
- Supplementary protection certificates for medicinal or plant protection products
How the 5% Tax Rate Works
Instead of paying the standard income tax, you can apply the 5% IP Box rate only to income derived from eligible IP rights.
Example:
If your company earns PLN 1,000,000 from software licensing and qualifies for IP Box:
- Standard CIT at 19%: PLN 190,000 tax
- IP Box at 5%: PLN 50,000 tax
→ Savings: PLN 140,000
Requirements and Documentation
To benefit from the IP Box regime, you must:
- Conduct qualifying R&D activities related to the IP.
- Own or co-own the intellectual property.
- Maintain detailed records that track R&D expenses, IP income, and other related financial data (so called: “IP BOX evidence”)
- Be able to demonstrate the link between your R&D work and the resulting IP income.
Common Mistakes and Challenges
Many businesses fail to take advantage of the IP Box because:
- They are uncertain whether their work qualifies as R&D.
- They do not separate IP-related income from other business income.
- They lack proper documentation required by tax authorities.
Why Work With a Tax Advisor
Applying for IP Box is not just a simple tax form change – it requires:
- Analysing your projects to determine eligibility.
- Preparing and maintaining compliant documentation.
- Linking IP income to specific R&D activities.
- Navigating interpretations and clarifications from the Polish tax authorities.
We guide clients through every step:
- Feasibility analysis
- Tax ruling applications for legal certainty
- Ongoing compliance and reporting
- Optimising your overall tax position
IP Box for Foreign and Expat Clients
If you are an expat entrepreneur or a foreign company operating in Poland:
- We explain tax residency and how it affects your eligibility.
- We ensure you comply with double taxation treaties.
- We provide full English-language support
Take the Next Step
The IP Box regime is one of the most attractive innovation incentives in Europe – but only if used correctly. With professional guidance, you can unlock significant tax savings while staying 100% compliant.
📞 Contact us today to arrange a consultation and find out if you qualify for the 5% IP Box rate in Poland.