R&D tax credit vs. R&D Center status
Under the R&D preference, taxpayers are allowed to deduct 100% of qualified costs and 200% of so-called employee costs, but here we would like to draw attention to entities with the status of a Research and Development Center (CBR), which are entitled to deduct up to 200% of their costs for most qualified costs.
CBRs are a special type of entity that can achieve an even higher tax benefit under the R&D tax credit, as they are allowed to deduct up to 200% of eligible costs in most cases.
In simpler terms, CBR status can be obtained by entrepreneurs whose net revenues from the sale of R&D services or industrial property rights they have created account for at least 20% of net revenues (with a turnover of more than PLN 5 million), or at least 70% of net revenues (with a turnover in the range of PLN 2.5 – 5 million). Such entities must also apply accounting regulations and must not be in arrears with taxes and contributions.
Thus, any entrepreneur whose revenues from the sale of products and services produced as part of R&D work meet the aforementioned conditions may apply to the Minister of Economy for formal granting of such status.
Obtaining CBR status entails the possibility of obtaining higher tax benefits under the R&D tax credit than other taxpayers in particular:
- Entities with CBR status are allowed to count as eligible expenses depreciation write-offs on structures, buildings and premises that are used in activities that entitle them to the relief.
- Taxpayers with CBR status are allowed to count expenses for expert opinions, opinions, consulting services and equivalent services, research obtained from entities other than scientific units as eligible costs.
- Entrepreneurs with CBR status are allowed to deduct most qualified expenses at 200% of the expenses incurred, except for patent expenses incurred by large taxpayers with CBR status, as such expenses can be deducted at 100%.
- In addition, CBR entities are guaranteed exemption from: real estate tax, agricultural tax and forestry tax.
An entrepreneur who meets the conditions indicated in the earlier part of this entry should submit an application with the necessary documents, which will indicate that:
- meets the revenue criteria indicated in the law, including the R&D revenue criterion,
- applies the accounting regulations,
- is not in arrears in the payment of taxes and social and health insurance contributions.
Note that there is no strict date for submitting the above application, but it is important that it be submitted by the maximum of the respective year in which the approval of the financial statements for the previous fiscal year took place. For example: in 2022, the deadline for submission is December 31, 2022 (the date of receipt by the authority is decisive).
