Everything you need to know about tax relief for robotization

From this article, you will learn:

• How the robotization relief works and what the experiences of taxpayers who have so far used the deduction of incurred costs are?
• Who can benefit from the relief and what related issues can be considered relatively clarified in existing tax practice?
• What areas of robotization relief may cause tax risk and how can taxpayers protect themselves against it?

Some time has passed since the introduction of a new tax relief for robotization in Poland, which encourages us to summarise its effects and check how it works in practice. Although regulations in some areas are still controversial, tax interpretations and court judgments issued so far are slowly shaping the practice. And it can be concluded that the robotization relief is indeed an attractive mechanism that brings significant tax savings.

However, due to the fact that the way of interpreting the provisions regarding some areas of preferences still remains unclear, it is still necessary to carefully analyse the provisions in relation to the specific case of the taxpayer. Tax advisors who know well how the Polish tax authorities operate strongly recommend securing the company and obtaining an individual interpretation before using the robotization tax relief. 

How does the robotization relief work and what costs incurred for robotization are deductible from the tax base?

The relief allows you to deduct from the tax base 50% of the costs of obtaining income incurred in the tax year for the purchase of industrial robots, training in the use of a new industrial robot and broadly understood robotization. Thanks to the relief, such expenses are recognised twice: as an "ordinary" tax expense (at this point the expenses are recognised for the first time), and then their half (recognised as an expense now for the second time) additionally reduces the CIT tax base.

After the introduction of the robotization relief, however, it was unclear what the taxpayer could actually deduct from the tax base.

Initially, the Polish Ministry of Finance presented a very liberal and favourable position. It indicated that thanks to the relief, it is possible to deduct 50% of the expenses incurred during the purchase of an industrial robot from the tax base on a one-time basis. Currently, however, the authorities issue different interpretations. They indicate that the deduction applies to 50% of the depreciation write-off made in a given year. A number of interpretations issued by the tax office indicate that this practice will dominate in the decisions of the authorities and adopting a different approach is fraught with tax risk.

Deducting depreciation deductions under the robotization relief (and not the expense incurred when purchasing and putting an industrial robot into operation) obviously means that the use of the relief will be spread over time. However, it is worth remembering that the CIT Act allows for the depreciation of fixed assets according to various methods - which in turn allows for accelerated depreciation. Planning the depreciation method in such a way that it is tax effective is therefore an area that requires careful analysis. Therefore, this is an issue worth consulting with our experts.

Conditions for using the robotization relief:

What is the duration of the relief and within what period should the robot be purchased to benefit from it?

A characteristic feature of the tax relief for robotization is its time limitation. The Polish government introduced this preference to the CIT Act in 2022 and it is to be valid until the end of 2026. Therefore, a doubt arose whether the relief deduction can be applied to robots that were acquired before its introduction, but which are still depreciated by the taxpayer.

An analysis of currently issued tax interpretations indicates that the relief also applies to robots that taxpayers purchased before 2022. This is a very favourable position and the group of interested parties should also include entities that invested in robots some time ago.

In our opinion, however, this is still an area that should be secured with an individual interpretation that will protect the taxpayer against a potential change in the liberal approach of the Polish tax authorities.

Industrial robot – what is it?

The taxpayer must thoroughly understand the conditions of the tax relief and decide whether the machine he or she owns actually meets the definition of an "industrial robot" within the meaning of the CIT Act.

The Polish legislator provided an extensive definition of an industrial robot, indicating that it is an automatically controlled, programmable, multi-tasking and stationary or mobile machine, with at least three degrees of freedom, having manipulation or locomotion properties for industrial applications, which additionally meets 4 detailed conditions: it exchanges data in digital form, is connected to ICT systems, is monitored using sensors, etc. and is integrated with other machines in the production cycle. A detailed and complete definition can be found on our dedicated robotization relief website.

Controversial conditions for using the tax relief for robotization

It is worth paying special attention to one of the problem areas of the robotization relief. In practice, the requirement that robots be intended only for "industrial applications" raises doubts.

This condition is sometimes used by authorities to limit taxpayers' right to benefit from the relief. They indicate that the phrase "industrial applications" should be understood only as the purpose of the machine for use in industry understood as the strict production (manufacture) of goods, and not broadly (e.g. as processes occurring after the production of goods, enabling these goods to enter the market, especially their distribution). This interpretation results in the exclusion from preferences of expenditure on works that improve distribution processes and are also used for packaging finished products or their storage.

Fortunately, administrative courts come to the aid of taxpayers and take a more liberal stance in their rulings.

According to the courts, production processes are aimed not only at the direct production of the product and also include - along with the various processes taking place during these periods - further stages of product management (taking place even between the materials warehouse and the finished products warehouse). Therefore, the relief may also potentially cover works that improve e.g. quality control or packaging processes. The preference should also be applicable to robots that are used to prepare collective packaging (e.g. pallets), if the taxpayer further distributes them in this form.

Undoubtedly, the certainty that the purchased device meets the statutory definition of an industrial robot is crucial for the safe use of the relief. Therefore, this is an issue that is worth consulting with our experts each time and additionally securing an individual interpretation.