This is to let you know of an important development concerning safe use of the research and development relief.

On 13 February 2024, the Finance Minister issued a public tax ruling resolving the question whether the research and development relief includes also mandatory expenses incurred by the employer in connection with an employee’s authorised absence from work to the extent that the employee was engaged in R&D work as part of their duties of employment.

The ruling was favourable for taxpayers. The Minister said that “there are thus no legal grounds for claiming that the expenses eligible for R&D relief do not include amounts paid by the employer to an employee engaged in R&D activities as his income under Article 12(1) of the PIT Act while he is not working due to authorised absence.”

However, relying on that public tax ruling, the Director of National Revenue Information has recently started to fully cancel private tax rulings on R&D relief even where payment for time off due to authorised absence (which is precisely what the public tax ruling is concerned with) was not in the least part of the subject-matter ruled upon or was one of many issues for which the given ruling was requested.

Those taxpayers whose private rulings have just been cancelled so that they lost the related protection of law are now entitled to take further steps to obtain assurance as to their R&D relief compliance.

If this issue pertains to your business and you are interested in our assistance, please contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.