Amendments to the CIT - investment expenditures | KPMG | PL

Amendments to the Corporate Income Tax Act as of 1 January 2016 - investment expenditures

Amendments to the CIT - investment expenditures

On the 1st October 2015, in line with the program of support for innovation, a new Act amending certain legislation has been passed by the Senate. As long as it is signed by the President, this Act will provide significant amendments to the taxation of investment expenditures. These amendments will be applicable as of 1st January 2016.

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Removal of tax relief for the acquisition of new technology

As of 1st January 2016 the tax relief for new technology’s acquisition will be removed. So far this tax relief has enabled tax savings to be obtained in the amount equal to 9.5 per cent of the expenditures spent on the acquisition of some types of intangibles – in particular patents, software and other types of copyrights.According to transitional provisions taxpayers will be able to benefit from the relief regarding acquisitions (implementations) completed in 2015 – as such taxpayers might wish to consider speeding up at least some steps of these processes in order to ensure that intangible assets (or their parts) may be entered to the account records by the end of the current year.While this relief is being removed, taxpayers will be still able to benefit from the relief for intangible assets acquired in previous years (up to 2009).

Implementation of the new tax relief for research and development activity

A replacement for the tax relief for the acquisition of new technology will be implemented in the Corporate Income Tax Act. This relief will enable an additional tax deduction for expenditures spent on research and development activity.

In principle, the deduction will be equal to:

  • 30 per cent of salaries of employees involved in research and development activity and
  • 10 per cent (for large companies) or 20 per cent (for other companies) of other costs connected with research and development activity (including depreciation and amortization).

The Act implements also a definition of research and development activity and limits the possibility of benefiting from this relief by companies pursuing their economic activity in a Special Economic Zone.

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