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Tax support for commercialisation of knowledge

The Act of 29 August 2014 Amending the Corporate Income Tax Act, the Personal Income Tax Act and Certain Other Acts went into force on 1 January 2015.

The changes include regulations designed to encourage the scientific community to cooperate more closely with business by postponing recognition of taxable income from in-kind contribution of intellectual property to companies.

By whom?

The subjective scope of application of the preferential rules for taxation of in-kind contributions is limited to a fixed list of entities referred to as “commercialising entities.” The group includes universities, the Polish Academy of Sciences and its scientific institutes, research institutes, companies established pursuant to the Higher Education Law, the Polish Academy of Sciences Act and the Research Institutes Act, and individual creators.

The new regulations therefore cannot be applied by persons or units conducting R&D activity but lacking the status of the aforementioned entities, e.g. R&D centres, nor by enterprises—legal persons from innovative sectors established under the Commercial Companies Code.


The privilege of postponing taxation applies only to commercialised intellectual property, i.e. in-kind contributions in the form of:

  • Rights to a patent or invention, utility model, industrial design, or topography of integrated circuits, and rights to obtain such rights or priority rights, as defined in the Industrial Property Law of 30 June 2000
  • Economic copyright to computer programs
  • The equivalent of documented knowledge (information) suitable for use in industrial, scientific or commercial activity (i.e. knowhow)
  • Rights to use the foregoing rights or assets under a licence agreement.

The list of intellectual property rights covered by the tax preference is therefore limited to items that the lawmakers regarded as having the greatest potential for innovation. In particular, as economic copyright other than to software, e.g. copyright to works of industrial design, architecture and urban planning, has been excluded from the commercialisation of intellectual property for the purpose of this tax incentive.

To whom?

In-kind contributions in the form of commercialised intellectual property will not generate taxable income for the contributor over the course of 5 years when made to a limited-liability company or joint-stock company. This tax preference will not apply to in-kind contribution to a joint-stock limited partnership, even though such entities have been CIT payers since the beginning of 2014.


As a rule, an in-kind contribution to a company in a form other than an enterprise or an organised part of an enterprise is subject to income tax at the time the contributor takes up shares in the company in exchange for the contribution. However, under this amendment, a commercialising entity will not be required to pay income tax until 5 years after taking up shares in exchange for in-kind contribution of intellectual property, unless at some earlier time the shares are sold, redeemed or cease to exist, or the commercialising entity ceases to be a Polish tax resident.

The amount of taxable income in this case will be determined as the difference between the sale price, which should reflect the market value, and the tax costs as of the date of the in-kind contribution, in the amount of the tax basis of the commercialised intellectual property (if it constitutes intangible or legal rights) or the expenses actually incurred to acquire it (if it does not meet the conditions to qualify as intangible or legal rights).

What next?

The new regulations should be regarded as a positive but not entirely sufficient step toward stronger support for R&D activity in Poland.

As a rule, the amendment is aimed at researchers operating outside the private sector and in strictly defined forms. Not having to invest their own funds from the profit generated—at least for the initial period of implementation of the given solution—may encourage such researchers to cooperate with private enterprises, but it does not provide any tax incentive for the private enterprise.

This income-tax preference is not correlated to any changes in VAT. For VAT purposes, contribution of commercialised intellectual property constitutes a service taxed at the standard VAT rate, and the person making the in-kind contribution is the entity required to pay the VAT.

Upon entry into force of this amendment, tax relief for new technologies for entities obtaining an in-kind contribution was eliminated by excluding the use of this relief in the case of acquisition of new technology (constituting intangibles and legal rights for tax purposes) through in-kind contribution.

Will it pay off?

Despite the drawbacks, this amendment may inspire cooperation between academia and business, encouraging creators to take their ideas beyond their own laboratory. Primarily it may provide an interesting alternative for creators seeking an investor but not wishing to sell off all rights to the intellectual property or wishing to maintain some control over its further development. If the mutual rights and obligations of the shareholders are properly arranged, the creator may continue to influence what happens to his or her idea after contributing the intellectual property to the company.

Joanna Prokurat, Tax Practice and New Technologies Practice, Wardyński & Partners

The article is a part of the New Technologies Newsletter, March-April 2015