IP Box for technology companies

In a recent article published by Strefa Inwestorów, Łukasz Karpiesiuk explains IP Box – a tax incentive for innovative businesses, especially from the gaming, biotechnology and IT sectors.

IP Box works not only when you sell the right itself or grant the respective license, but also when you sell products or services protected by the intellectual property right. In such a case, however, you have to determine which part of the price to be paid for a product or service corresponds to the fee due for the protected technology and consider that it is that part that should be regarded as eligible income.

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To benefit from the preferential tax rate, it is not enough to buy a patent or another legally protected solution. You have to create, develop or improve it within the framework of your business activities.

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You have to calculate a special nexus ratio – that is the proportion between the costs of creation / improvement of the right done on your own and in cooperation with unaffiliated entities and the costs of acquisition of the ready-to-exercise right. As a result, you will learn which percentage of your income will be subject to the reduced tax rate. The point is that the income from solutions which you actually develop should be preferred over the one from purchased patents which you neither create nor improve.

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It is quite likely for products of IT companies, including gaming ones, to be protected by one of the eligible intellectual property rights – copyright to software – which enables IP Box to be used.