IP BOX – How to Reduce Tax to 5% for IT Companies and Developers in Poland

The innovation and IT sector in Poland is developing rapidly, and one of the most effective tools supporting entrepreneurs is the IP BOX tax relief.
It allows income derived from intellectual property — such as software — to be taxed at a preferential rate of 5% PIT or CIT, instead of the standard 19% or 32%.

What is the IP BOX relief?

The IP BOX regime was introduced by the Act of 23 October 2018 amending the tax laws (including PIT, CIT, and the Tax Ordinance) and continues to apply in 2025.
Its goal is to promote innovation and technological development. The relief can be used by both companies and sole proprietors, including B2B software developers. Active link for the text under line above 🔗 Official guidance from the Polish Ministry of Finance on IP BOX (in Polish)

How does it work?

The IP BOX relief supports the growth of innovation and technology by allowing taxpayers to apply a 5% tax rate to income earned from qualified intellectual property rights instead of the standard rates:

• 12% or 32% – for PIT taxpayers taxed under general rules,
• 19% – for PIT taxpayers under the flat tax regime,
• 9% or 19% – for CIT taxpayers.

It’s important to note that the IP BOX relief can only be applied in the annual tax return — ongoing income from qualified IP during the year is taxed according to your standard tax form.

Applying the IP BOX allows such income to be taxed at 5% PIT or CIT, making it one of the most attractive tax mechanisms for entities operating in innovation and high technology.

Who can benefit from IP BOX and what are the conditions?

To apply the preferential 5% rate, the taxpayer must meet a number of statutory conditions, including:

1. Conduct R+B activity (research and development),
2. Create, develop, or improve a qualified intellectual property right within this activity,
3. Maintain separate accounting records covering all operations related to income and expenses from qualified IP (Art. 24e pas.1 point 1 of the CIT Act and Art. 30cb pas.1, point 1 of the PIT Act),
4. Earn income from qualified IP taxable in Poland,
5. Incur qualified expenses related to creating or developing qualified IP.

Fulfilling these conditions forms the basis for applying the relief, while confirmation of its proper use can be obtained through an individual tax interpretation issued by the Director of the National Tax Information.

The Ministry of Finance’s tax guidance of 15 July 2019 provides detailed explanations on how the relief works and who is eligible.

What qualifies as eligible intellectual property (IP)?

Qualified IP rights include, among others:

• patents
• utility models
• industrial designs
• computer software rights
• topographies of integrated circuits, and other legally protected works.

The key requirement is that the IP must be created or improved within your R+B activities and be legally protected.

How to apply for the IP BOX relief?

Before using the IP BOX benefit, you should prepare:

• a clear description of your R+B activity
• documentation confirming the creation of software or patents
• separate financial records
• and, if necessary, file a request for an individual tax interpretation.

Want to legally reduce your tax burden?

Need help preparing the documentation and obtaining a safe, official confirmation of your right to use the IP BOX relief?
📩 Contact me and let’s discuss the details. (Active link: Contacts – Tatyana Lyashchenko, your lawyer in Poland)