New tax super deduction for R&D in annual corporate tax returns for 2016

New tax super deduction for R&D

In the annual income tax returns for 2016, business will have the opportunity for the first time to claim a new tax relief for research and development (R&D).

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KPMG in Poland

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New tax super deduction for R&D in annual corporate tax returns for 2016

In the annual income tax returns for 2016, business will have the opportunity for the first time to claim a new tax relief for research and development (R&D).

Benefits of new incentive

Costs incurred in 2016 on R&D may allow an incentive to be claimed in the form of an additional deduction from the tax base and thereby reduce the tax payable.

  • In summary, the new relief allows the following to be taken into account in the calculation of income tax:
    130 percent of salary costs of employees involved in research and development (150 percent from 2017)
  • 110 percent (130 percent from 2017) for large enterprises or 120 percent (150 percent from 2017) for SME’s of other eligible costs associated with research and development (including depreciation).

Example of R&D super deduction

Wide range of new tax relief

R&D are widely understood to be activities related to the development of improved or new technologies/processes/products.

The new relief will be widely available to businesses, due to the following reasons:

  • there is no need to have a dedicated R&D department
  • all industries are eligible for relief (IT, food, manufacturing, chemical, pharmaceutical, service, etc.)
  • the are no criteria for selection of the projects – just that the enterprise carries out R&D
  • no – as in the case of grants – requirement to establish groundbreaking solutions in the world or Europe – just the requirement for there to be innovation for the enterprise
  • relief includes cumulatively all the costs incurred in a given year on R&D activities
  • relief can be combined with grants
  • the intention to use the relief or identification of specific costs do not require prior notification during the year (as it is with the cash grants for R&D)
  • even costs of projects which have not been successful will also be eligible.

Settlement of the new relief

The new relief may be claimed in the annual CIT tax return, which should be submitted together with a new annex CIT-BR.

How we can help?

The Grants & Incentives team at KPMG is part of the international network of experts KPMG R&D Incentives Network. We have many years of experience in identifying and claiming grants and incentives for R&D worldwide.

We offer a fully comprehensive approach enabling companies to benefit from the new tax relief for R&D:

  • we can map the operations and costs eligible for deduction
  • we assist in the accounting separation of the eligible costs
  • KPMG may calculate the amount of relief and help to fill in declaration
  • if necessary, we help in adjusting the company organizational – legal and accounting processes for the effective use of incentives.

Our many years of experience in claiming support for R&D project and cooperation with scientific and technical experts offers our customers an efficient service for claiming tax relief for R&D.
 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2017 KPMG Tax M Michna Sp.K, a Poland limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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