An IP Box correction may enable a business owner to apply the preferential 5% tax rate to income earned in previous years and recover the resulting tax overpayment. This issue was recently discussed by Rzeczpospolita, with several comments from Dr Piotr Sekulski, tax adviser at Outsourced.pl.
The Polish IP Box regime has been available since 1 January 2019. It applies to qualifying income derived from intellectual property rights. In practice, it is most frequently used by software developers and businesses that create or develop proprietary software.
IP Box correction for previous years
Some businesses did not claim IP Box when filing their original annual tax returns, even though their activities may have met the relevant requirements. This was often caused by uncertainty surrounding the rules, insufficient documentation or concerns about a potential dispute with the tax authorities.
As a result, many taxpayers are now reviewing their previous settlements and considering whether amended returns may be filed.
Dr Piotr Sekulski, tax advisor
The relief has applied since 1 January 2019. Initially, there were many uncertainties, and some businesses were afraid to use it. They are only returning to it years later.
Tax returns may generally be amended for periods that are not yet time-barred. This means that in 2026 taxpayers may still consider amending their 2020 tax returns. However, merely operating in the software sector does not automatically create an entitlement to IP Box. The statutory conditions must be met, and the qualifying income must be calculated correctly.
IP Box correction and a tax refund
Applying the 5% rate in an amended return may result in a significant tax overpayment. The amount will depend on the qualifying income and the number of years covered by the correction.
An amended return showing a tax overpayment is also likely to be examined more carefully by the tax office. The authorities may review the taxpayer’s records, the nature of the development activities, the calculation of the nexus ratio and the relationship between the relevant costs and qualifying intellectual property rights.
Dr Piotr Sekulski, tax advisor
If the tax office refunds the overpayment following a detailed verification, there is a good chance that nobody will return to the matter.
A refund issued without a detailed review does not necessarily mean that the settlement will never be examined again. The tax authorities may later initiate an audit and challenge the taxpayer’s entitlement to the relief. An IP Box correction should therefore be preceded by a careful review of the taxpayer’s activities, calculations and supporting documentation.
The full article containing the experts’ comments is available in Rzeczpospolita.
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How can we help?
At Outsourced.pl, we help taxpayers assess whether IP Box may be applied to previous years, review their activities and documentation, calculate qualifying income and prepare for filing amended returns and any subsequent verification by the Polish tax authorities.
