From January 1, 2019, depositing copyright works and works of related rights may bring significant tax relief to holders of copyright or related rights, as well as to the holders of rights or the applicant for the registration of an invention. According to the Corporate Income Tax Law and the Rulebook on Conditions and Methods of Exempting the Qualified Income from the Corporate Income Tax Base, it is possible to exempt up to 80% from the tax base of the income which stems from commercializing the subject of the intellectual property. This means that the company’s income tax can be effectively reduced from 15% to 3%.
This is especially significant for IT companies that have their own products because software is (as a rule of thumb) protected by the Law on Copyright and Related Rights.
To qualify for this tax relief, it is necessary to deposit the copyright, i.e. subject to related rights to the competent authorities, in accordance with the Law on Copyright and Related Rights. If the subject of the copyright is software, there is an option to upgrade or adapt the software, so the fact that this type of copyright subject is constantly changing is not an obstacle to depositing the copyright.
In order to qualify for tax relief for an invention, it is necessary that the patent is registered or that the application to register the patent has been submitted to the Intellectual Property Office.
One should not forget the fact that the holder of a copyright, i.e. related right is obliged to present the qualified income in the tax balance (the income to which the tax exemption is applied). Also, upon the Tax Administration’s request, it is obligatory to deliver specific documentation in a manner and form prescribed by the Ministry of Finance.