A 50% tax cost scheme

Who can take advantage of the 50% rate for tax-deductible expenses?

People are the key asset in the IT industry or, more broadly, in the new tech business. By applying the 50% tax cost scheme, the employer allows employees to earn more money. For this reason, every new tech business wishing to improve their attractiveness as an employer should consider applying 50% tax cost scheme.
The 50% tax cost scheme is available to employees developing computer programs and games, as well as employees involved in research and development, scientific, research or journalistic activities.

In any case, it is crucial that the 50% tax cost scheme applies only to employees involved in the creation of works within the meaning of copyright law.

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    What are the benefits?

    In accordance with the PIT Act, the increased tax costs cannot exceed PLN 120,000 per year.

    What does this mean in practice?

    The application of the 50% rate for tax-deductible expenses to remuneration of PLN 12,000 gross per month reduces the employee’s tax by approx. PLN 7,500 per year.

    What steps should be taken by the employer to apply the 50% tax cost scheme to employees’ salaries?

    Steps that should be considered by the employer to apply 50% tax cost scheme include:

    • implementation of a system that makes it possible to identify tasks performed by employees leading to creation of copyright works and to verify whether a copyright work was actually created;
    • implementation a system ensuring that copyright works are appropriately documented;
    • ensuring the appropriate wording of employee documentation (employment contracts or remuneration regulations).

    This may sound complicated, but in practice, a significant number of employers already have in place systems that at least partially allow them to apply the 50% tax cost scheme.

    How can we help?

    We help employers:

    • determine which employees are potentially eligible for the 50% tax cost scheme;
    • implement a system that makes it possible to identify and document works created by employees to whom the 50% tax cost scheme will apply;
    • revise employee documentation;
    • deal with questions that may arise as to the application of the 50% tax cost scheme in specific situations or with respect to individual remuneration components;
    • prepare applications for an individual interpretation of tax law in matters not covered by the general tax ruling issued by the Ministry of Finance.