Who's eligible
Programmers, creators, designers, scientists and IT companies that earn from intellectual property they have created themselves: their own algorithms, code, patents, industrial designs.
Rate: 5% PIT/CIT on qualified income. For comparison: standard scale is 12–32% PIT or 9–19% CIT.
What qualifies as IP
Qualified IP rights (KPWI):
- copyright in computer programs,
- patents,
- registered industrial designs and trademarks,
- supplementary protection certificates for medicinal products,
- exclusive plant variety rights.
Most common: computer program code.
Three conditions, no exceptions
1. Created / developed / improved. Purchased rights don't qualify, because it has to be your creative work. Outsourcing core code to a subcontractor doesn't fit either.
2. R&D activity. IP Box comes bundled with R&D. You have to keep an R&D log (who, how many hours, on what), separate from the IP records.
3. Records of qualified income. A separate "ledger" for each right: how much income, what costs, what result. Without this, no relief.
The nexus ratio
Qualified income is multiplied by the nexus ratio, the share of your own work in total creation costs.
A low ratio = low relief. The ratio drops when:
- a large share of the work is subcontracted (B2B),
- the IP was bought in and only enhanced,
- you have significant licences to third-party IP embedded in your product.
Common mistakes
- No contract split: a developer works on both the IP and on client support. Without a documented split, the whole income loses qualified status.
- Too broad an IP definition in records, e.g. "all 2025 projects". The tax office wants a breakdown by specific code/product/project.
- No individual tax ruling. Without one, every audit is a lottery.
Realistic timeline
- Audit → 2–3 weeks.
- Tax ruling application → 3–6 months waiting.
- First settlement → after the first full year close.
We run IP Box engagements end-to-end, from eligibility audit to writing the ruling application. Typical outcome: 50–70% income tax reduction for IT firms.