According to the Provincial Administrative Court in Gorzów Wielkopolski due to the fact that the possibility of benefiting from the Relief of Innovation Box (IP Box) appears only in an annual statement, keeping current accounting records for its needs is not required during the year.
Inserted 1 January 2019 The instrument commonly referred to as "IP Box" is a preferential income tax rate. It allows the taxpayer, if it meets the conditions laid down in the PIT or CIT laws, to apply a reduced, 5% Rates instead of rates 17 or 32% (tax scale) or 19% rope tax rate.
According to the court, incorrect record keeping of the said records under Article 30 cb of the PIT Act is one that prevents the establishment of a correct tax base at a rate 5%, and those which do not contain the information in question under Article 30 cb section 1 that bill
These conditions are as follows:
- the taxpayer must earn revenue from certain qualified intellectual property rights laws, including the copyright of the computer program - 5% the rate may be applied only to these incomes;
- the subject of the protection of these rights (e.g. a computer program) must be created, developed or improved by the taxpayer in the course of his research and development;
the taxpayer must keep records in accordance with the requirements of the PIT or CIT Act, as the obligations imposed on the beneficiaries of this solution include, inter alia, the obligation to keep accounts in such a way as to ensure that income, income and income costs (loss) attributable to each qualified intellectual property right are determined - in practice, the records serve primarily to calculate the income to which it can be applied 5% At stake.
We learn from the decision of the WSA in Gorzów Wielkopolski that the complainant asked the Director of National Tax Information to give an individual interpretation of tax law.
In his request for interpretation, he asked whether he could benefit from the rate 5% from income generated from the transfer of copyright to the software it produces 2019 in the correction of the annual statement, if it does not yet have the records referred to under Article 30 cb Act dated 26 July 1991 on personal income tax (Journal of Laws of 2020, item 1426 t.j.
of day 21 August 2020).
In its application, the complainant indicated that it met all the statutory requirements concerning the possibility of benefiting from a preferential tax rate of 5% on the income generated by qualified intellectual property rights, and the development of a reliable and realistic and in accordance with the provisions of the law of registration referred to in the above law would be commissioned by the accounting officer.
In his reply, the Director of KIS clearly indicated that he did not approve the lack of record keeping. He also stressed that the drawing up of the records only to fulfil the obligation arising from the provisions laid down, even where it would be possible to correctly determine the tax base at the rate 5%, Deletes the right to apply the preferential rate of taxation of income. By thus denying the taxpayer the possibility to benefit from a preferential rate of income taxation on the basis of a recent record.
It is worth noting that ‘taxable persons subject to taxation on the basis of Article 30ca are obliged:
- identify any eligible intellectual property right in the accounts;
- keep accounts in such a way as to ensure that revenue, cost of obtaining income and income (losses) are determined for each eligible intellectual property right;
- separate the costs in question under Article 30ca(4), for each eligible intellectual property right, in such a way as to ensure the determination of eligible income;
make records in the accounts kept in such a way as to ensure the determination of the total income from qualified intellectual property rights - where the taxpayer uses more than one qualified intellectual property rights and the accounting accounts cannot meet the conditions in question Under points 2 and 3;
make records in the accounts kept in such a way as to ensure that the income from qualified intellectual property rights is determined for that product or service or for those products or services - where the taxable person uses one a qualified intellectual property right or more of those rights in a product or service or in products or services, and the accounting records cannot meet the conditions in question Under point 2-4."
Therefore, WSA in Gorzów Wielkopolski disagreed with the Director of KIS's reply. According to the court, incorrect record keeping of the said records under Article 30 cb of the PIT Act is one that prevents the establishment of a correct tax base at a rate 5%, and those which do not contain the information in question under Article 30 cb section 1 This bill. If that record meets the stated objective at the date of the settlement, it cannot be considered incorrectly conducted.
In addition, in the assessment of the WSA in Gorzów Wielkopolski, the Director of KIS has misinterpreted the Article 30 cb section 1 and 2 the PIT Act by adopting that the separate records referred to in the legislation only drawn up for settlement purposes do not fulfil the statutory conditions. According to the court adopted by the Director of KIS, the above-mentioned position that "the creation of this separate record only in order to fulfil the obligation resulting from the provisions laid down, even if it is possible to correctly determine the tax base at a rate on the basis of it 5%, Deletes the right to apply the preferential rate of taxation of income" is too far-reaching and therefore incorrect.
Thus, according to the WSA in Gorzów Wielkopolski, the taxpayer will be able to benefit from a preferential income tax rate of 5% for the transfer of copyright to the software it produces 2019 even if he did not keep the records in question during the tax year under Article 30 cb section 2 PIT Act. This is good news for taxpayers who did not keep tax records for IP Box purposes during the year, and would like to benefit from the preferential tax rate by adding the prepared records to the correction of the annual statement.
Judgment of the Provincial Administrative Court in Gorzów Wielkopolski of 30 July 2020, reference no. I SA/Go 115/20
Author: Paweł Boś
Junior Tax Consultant, related to Russell Bedford Poland 2018. Author of numerous articles on legal and tax matters, published in the industry press. Law student at Leon Kozminski Academy in Warsaw