R&D Relief Without a Dedicated R&D Department?

The research and development (R&D) tax relief is one of the most attractive tax optimization tools available to entrepreneurs in Poland. It allows for an additional deduction from the tax base of costs incurred for innovative activities – such as product development, testing new technological solutions, or improving production processes. Despite its growing popularity, many companies still believe that a formally separated R&D department is required in order to benefit from the relief.

This is a misconception. Polish tax regulations do not impose such a requirement. The CIT Act (and analogously, the PIT Act) refers solely to the nature of the conducted activities, not the organizational structure of the company. In practice, this means that companies carrying out innovative projects within their production, IT, engineering, or technology departments – without establishing a separate "R&D department" – can still benefit from the R&D tax relief.

Also see: R&D Relief

When Can an Activity Be Recognized as R&D – Regardless of Organizational Structure?

Eligibility for R&D tax relief depends exclusively on the nature of the activities performed, not on whether a formal R&D unit exists within the company. The regulations do not require a company to have a dedicated organizational unit responsible for innovation – what matters is whether the company is actually engaged in creative activities aimed at developing new or improved solutions.

According to the definition provided in Article 4a point 26 of the CIT Act, research and development activity is:

“creative activity including scientific research or development work, undertaken systematically to increase the body of knowledge and use this knowledge to create new applications.”

In practice, this means that activities qualifying for the R&D tax relief may be conducted in various parts of the organization – wherever creative and innovative work is being carried out. It does not have to be a separate department or organizational unit. What is crucial is that the work:

• has a clearly defined goal related to the development of new products, services, technologies, or processes,
• is conducted in a planned and systematic manner,
• involves solving technical or technological problems for which there are no ready-made or obvious solutions.

Cost Allocation in R&D Activities

To effectively benefit from the R&D tax relief, companies must not only conduct qualifying R&D activities but also correctly allocate the related costs. One of the most important requirements is the clear and precise identification of eligible costs that may be included in the tax relief calculation.

Eligible costs include, among others, employee salaries for those involved in R&D, the cost of materials and raw materials, research services, or depreciation of fixed assets used in R&D work. However, it is essential that these expenses are allocated proportionally to the actual time and scope of the R&D work performed.

This means the company should maintain reliable time-tracking and documentation that makes it possible to separate out the portion of costs directly related to R&D activities. For example, if an employee is engaged in R&D work for 40% of their time, only that portion of their salary can be considered a qualified cost.

Incorrect cost allocation or lack of proper documentation may result in the denial of the relief during a tax audit. Therefore, systematic and detailed documentation of activities and expenses is essential to maintain eligibility for the tax benefit.

Also see: Ongoing Tax Advisory Services

No Requirement for a Dedicated R&D Department – Confirmed by Tax Authorities and Courts

In tax practice, the view that a formally separated R&D department is not required to benefit from the relief is gaining increasing confirmation. What matters is the actual conduct of R&D activities and the proper documentation of the related costs.

This view was confirmed by the Supreme Administrative Court in its ruling of August 20, 2024 (Case No. II FSK 595/24), stating:

“A taxpayer’s research and development activity is usually linked to the subject of their business. Therefore, it must be agreed with the appellant that they do not have to start a new type of business in order to benefit from the R&D relief. Article 18d(2)(1) and (1a) of the CIT Act also shows that there is no need to create a separate department (or team) dedicated solely to R&D, as employee remuneration is included in qualified costs to the extent that general working time is allocated to R&D activities.”

This ruling clearly indicates that in order to use the relief, there is no requirement to create a new activity or a separate organizational unit. It is sufficient that the entrepreneur carries out R&D activities as part of their existing business and can demonstrate which costs are related to those activities.

A similar approach was confirmed by the Director of the National Tax Information Office (KIS) in the individual ruling dated January 23, 2025, Ref. No. 0111-KDIB1-3.4010.803.2024.2.DW.

R&D Relief in Practice: Where Is It Most Commonly Applied?

R&D tax relief is popular across various sectors, especially where innovation and technological development play a key role. Companies most frequently using this tax preference operate in industries such as IT, pharmaceuticals, electronic equipment manufacturing, chemicals, food production, furniture and interior design, and the automotive sector.

In practice, R&D activity in these companies covers a wide range of tasks – from developing new technological solutions and creating software and IT systems to researching new materials or production methods. Often, these are works related to high-tech products or improvements in production processes that generate real market benefits.

R&D Relief – Not Just for Large Companies

It is important to note that R&D tax relief is available not only to large companies with extensive research teams, but also to smaller enterprises undertaking innovative work as part of even small-scale projects. In all cases, however, the activity must be creative and meet the legal criteria for R&D activities.

How Can We Help?

Many entrepreneurs carry out activities that could qualify for the R&D relief but are unsure whether their projects meet the statutory criteria. If you’re unsure whether your projects qualify, contact us – we will carry out a detailed assessment and help determine if you are eligible for the tax relief.

Beyond eligibility assessment, we offer comprehensive support in the implementation and settlement of R&D relief, including:

• Preparing documentation to justify applying the relief – we create R&D project descriptions, lists of eligible costs, and other required materials,
• Settling the relief in CIT/PIT – we prepare the data for the annual tax return and assist with any necessary corrections,
• Allocating costs to R&D activities – we help assign expenses in line with legal regulations and KAS practice,
• Internal trainings and workshops – we educate technical, financial, and management teams on how to identify and document R&D work,
• Advisory in the event of audits or disputes with tax authorities – we provide expert support during audits, inspections, and tax proceedings.