Ayming Report: After 5 years of R&D relief, 51% of companies have heard of it

An Opinia24* survey conducted for Ayming Poland shows that 48% of the companies which have heard of the R&D relief, have used this mechanism. For almost half of them (44%) it was a one-off experience, and less than one in three had settled the relief twice. Taking into account the size of a company, as much as 70% of enterprises with 250 or more employees have used this tax preference at least once. The SME sector is the least likely to apply the R&D relief, and it is this sector that could benefit most from additional financial means for innovations – reads the Ayming report ‘Business breathing a sigh of relief. 5 years of R&D relief in Poland’.

Although the R&D relief has been available in our country since 2016, it is still not a widely used solution. There are two main reasons for it. First, the relief provides a tangible benefit only to entrepreneurs carrying out R&D activities who pay income tax (PIT or CIT), and this limits the number of beneficiaries significantly. Second, it appears that it is still not a widely known mechanism and needs further promotion.

51% of our respondents who had heard of the R&D relief usually learned about it from the Internet (44%), then from the press (19%) and from their own finance or accounting department (13%). Government sources such as journals of laws, Ministry of Finance or National Centre for Research and Development websites, informed one in ten respondents. Not surprisingly, it is mainly innovative companies that have come across this mechanism. 60% of entrepreneurs declaring a high level of their own innovativeness as compared to international competition and 38% of those who show a lower self-assessment have heard of the R&D relief – explains Magdalena Burzyńska, Managing Director of Ayming Poland.

Financing innovation

Finding a budget for innovative projects still remains a major challenge in Poland. The Ayming report shows that for 41% of respondents, lack of sufficient financial resources is the biggest barrier preventing innovation growth. Only half of the entrepreneurs admitted that they have a separate budget for R&D projects. For 76% of the respondents it is sufficient and 18% admitted that it does not satisfy their needs related to R&D activities. 88% of the surveyed companies finance R&D projects from their own resources. In the second place (43%) there are EU subsidies, with national subsidies ranking third (24%). The R&D relief is used as a source of innovation funding by 16% of the respondents, although one in four surveyed companies has settled it.

– The funds coming from the settlement of the research and development relief primarily fund further R&D activities (80% of indications) and are invested in company development (68%). To a lesser extent, they are spent on improving the competences of employees (36%) or the current activities of a company (20%). The question of how significant the funds obtained from R&D relief settlement are for a company’s budget is a very interesting one. The same percentage of respondents (48% each) declare that they are an important source of additional financing as well as that they do not play a significant role in the budget, notes Agnieszka Hrynkiewicz-Sudnik, Director of Taxes and Innovation Financing Area at Ayming Poland.

Polish relief as compared with Europe

The R&D relief was introduced in Poland 11 years later than in the Czech Republic, while German taxpayers have been able to use it only since 2020. The level of deductions in Poland is 19% for CIT payers and 17% for PIT payers. Portugal has no match in this respect – tax generosity in that country is as high as 40%. Higher deductions are also available to entrepreneurs e.g. in France (30% for R&D companies and 20% for SMEs), Ireland and Germany (25% each), but Poland’s advantage lies in a relatively broad catalogue of eligible costs. In terms of the number of past years that can be included in settlements, our country is second only to Spain, where taxpayers can benefit from R&D relief up to 18 years back. In Poland and Italy it is 5 years back, in Germany – 4 years, in the UK – 2 years and in the Czech Republic – only one year back.

– Compared to other European countries, the very application of the research and development relief is relatively simple in Poland. All you need to do is submit a tax return with the CIT-BR or PIT-BR attachment. It is not subject to evaluation by any committee and the taxpayer does not need to have additional certificates, such as a document certifying the conduct of R&D activities (such a requirement is in place, for example, in Italy and in Germany). However, it is important to prepare appropriate internal documentation, including descriptions of R&D projects and to create accounting records of eligible costs. Entrepreneurs may also undergo a tax audit covering the last five accounting years – adds Marek Dalka, Manager of the Innovation, Relief and Subsidies Department at Ayming Poland.

Link to the report ‘Business breathing a sigh of relief. 5 years of R&D relief in Poland’: https://bit.ly/5latUlgiBR

Methodology: the survey was carried out by Opinia24 using CATI methodology on 101 companies. It was conducted from 11 February to 9 March 2021. The companies that qualified for it were those with 30 or more employees, that are active in the sectors involving R&D. Depending on the size of a company, the questions were answered by the owner, CEO, general manager, CFO or development manager.


Ayming Polska

Last Updated on July 8, 2021 by Łukasz