EXPANSION RELIEF – SUPPORT FOR COMPANIES SEEKING NEW MARKETS

Expansion relief is a tax solution designed for entrepreneurs who want to grow their business, increasesales, and promote their products both domestically and internationally. This beneficial tax preferenceis available to companies settling taxes under the progressive tax scale or the flat tax rate.

What is the expansion relief?

This relief allows for an additional deduction of costs incurred to expand the company’s market. Thismeans that an entrepreneur can benefit from a double deduction of expenses—100% as a deductiblebusiness expense and an additional 100% deduction under the relief. The maximum deduction limit is1 million PLN in a given tax year.

What expenses qualify for the deduction?

The expansion relief covers expenses such as: participation in industry fairs, including costs of exhibition space, transportation, accommodation, and meals;  promotional and informational activities, such as designing and printing advertising materials (brochures, leaflets, catalogs), running websites, or purchasing advertising space; adapting product packaging to meet the requirements of foreignmarkets or business partners;  preparing documentation necessary for sales, such as productcertification and trademark registration; preparing tender documentation required for submitting bidsin national and international tenders.

Conditions for using the relief

To benefit from the relief, a company must demonstrate an increase in sales revenue within twoconsecutive years following the year in which expansion costs were incurred. This growth can resultfrom: increased sales of products compared to the previous year,  generating revenue from the sale of new products, entering new foreign markets.

It is important that the additional revenue is subject to taxation in Poland.

How and when to apply the relief?

The relief can be claimed in the annual tax return for the year in which the eligible expenses wereincurred. If the company records a loss in that year or its income is lower than the allowable deductionamount, the relief can be utilized over the following six tax years.

Thanks to expansion relief, businesses have a real opportunity for dynamic growth and market expansion while reducing their tax burden. This solution can be crucial for entrepreneurs planning anintensive promotion of their products and business expansion.