Safe tax optimization

In the corporate world, withholding tax (WHT), is often an unavoidable cost associated with doing business. However, there are certain mechanisms that can allow to reduce this burden, including tax preferences. When applying these preferences, the key is to file the right applications and meet specific conditions, which is not always easy in practice.

The essence of the relief for research and development activities is the possibility of deducting from the tax base (income) expenses that constitute qualified costs incurred for the indicated activities. The legislator in the tax regulations has included a closed catalog of expenses that can form the basis for calculating the relief. Thus, a taxpayer under the relief is allowed to deduct from income only those expenses that fall into one of the statutory categories.

The R&D tax credit was introduced by the legislature in 2016, but since then it has gained significantly in attractiveness – the amount of maximum deductions under the credit currently reaches 200% for employee expenses and 100% for other expenses. Over the years, the catalog of expenses eligible for deduction under the relief has also been expanded, which has also increased its popularity.

Conducting research and development (R&D) activities is not only crucial for innovation and business competitiveness, but can also bring significant tax benefits. There is an R&D tax credit in the Polish tax system, which allows for preferential deduction of qualified costs related to this activity. However, many companies are unaware of the important conditions they must meet to take advantage of this relief. One of the most important is the proper documentation and recording of R&D costs incurred. In the following post, we will discuss in detail how this obligation is defined in the CIT Law, how to keep such records and what are the consequences of improper record-keeping. Whether you are new to the world of R&D or already taking advantage of this relief, this post will help you better understand the requirements for recording R&D costs.

Scientific research and development are at the heart of innovation and technological progress. They are aimed not only at increasing the stock of knowledge, but also at using this knowledge to create new applications. In Poland, entities engaged in this type of activity are eligible for a tax credit, however not all such activities automatically qualify for the credit. In this blog post, we will address the issue of determining what criteria must be met in order for research and development to qualify for the tax credit. We will analyze the prerequisites of creativity, systematicity and increasing the stock of knowledge, which are key in this context, and discuss interpretations of these conditions under tax law.

Conducting scientific research or development work is not only key to technological progress and innovation, but also to benefiting from the R&D tax credit. This relief can become an important financial support for companies that undertake creative activities aimed at using available knowledge to create new solutions. In the article below, we focus on the definition of research and development activities, according to the provisions of the CIT Law and the PIT Law, and discuss various examples of development work that may qualify for the R&D tax credit. Understanding these issues is crucial for any entrepreneur who wishes to take advantage of this relief.

Managing a company’s finances is not only a matter of increasing revenue, but also of dealing effectively with emergencies and unforeseen losses. One important aspect is the skillful use of tax benefits, which can help a company survive difficult periods. In today’s post we will focus on the situation when a taxpayer, despite taking advantage of the relief, incurs losses. We will discuss the options for accounting for such a relief, paying particular attention to the options for deducting expenses in the following six years and for a “cash” refund. We will also review the conditions that must be met to take advantage of these options. We will also zoom in on the potential pitfalls and limitations to be aware of when deciding on one of these solutions.

Taxation under the Estonian CIT system involves a number of responsibilities for taxpayers. In this material, we take a closer look at the specifics of these tasks, from recordkeeping obligations to bookkeeping to filing requirements and declarations. Do companies using Estonian CIT have to provide for the separation of undistributed profits and unabsorbed losses in equity? What declarations are required of shareholders? Answers to these and other questions can be found in the material.