Calculate how much you can save with IP Box (5% tax rate on income from qualified intellectual property).
Income from qualified IP
Developers usually have Nexus index = 1.0
Calculation results
How does IP Box work?
- IP Box reduces tax rate to 5%
- Applies to income from qualified IP rights
- Requires conducting R&D activities
- For developers, Nexus index usually = 1.0
Complete Guide to IP Box Benefit
What is IP Box?
IP Box is a preferential income tax rate of 5% on income from qualified intellectual property rights. The benefit was introduced in 2019 as part of Estonian CIT to encourage entrepreneurs to conduct R&D activities and commercialize innovative solutions. This is modeled on similar programs in other EU countries like France (patent box), Netherlands (innovation box), and Sweden.
How much can you save?
With standard income tax rates (19% flat tax or up to 32% in general rules), savings can be up to 14%. For example, with 200,000 PLN income from qualified IP, standard tax would be 38,000 PLN (at 19%), while with IP Box you pay only 10,000 PLN (5% of 200,000 PLN). Annual savings of 28,000 PLN.
Nexus Index - key to the benefit
Nexus is a coefficient (0-1) determining what portion of IP income comes from your own R&D activities. The more R&D costs you incur, the higher the index. For developers conducting their own development work, the index usually equals 1.0 (100%). Formula: n = (a+b)×1.3 / (a+b+c+d), where a = own R&D costs, b = R&D purchased from external companies, c = R&D from related parties, d = costs of acquiring finished IP.
- a - own R&D costs (salaries, equipment, software)
- b - R&D purchased from external companies
- c - R&D from related parties
- d - costs of acquiring finished IP
Qualified IP includes:
- Copyrights to computer programs and systems
- Patents and utility models
- Industrial designs and semiconductor topographies
- Plant varieties and medicinal products
- Know-how and trade secrets
Requirements and conditions:
- Conducting R&D activities
- Creating or developing qualified IP
- Maintaining separate accounting records for income and expenses
- Cannot use with flat tax (only PIT or CIT)
- IP must be used in business activities
What are the pros and cons of IP Box?
Benefits: Very low tax rate (5%), ability to combine with other benefits (R&D credit), incentive for innovation and development. Drawbacks: Need to maintain detailed records, narrow group of qualifying entities, restrictions on finished IP, risk of tax audit.
About IP Box Benefit
IP Box is a preferential income tax rate of 5% on income from qualified intellectual property rights. The benefit was introduced in 2019 to encourage entrepreneurs to conduct R&D activities and commercialize innovative solutions. This is similar to programs in other EU countries (France, Netherlands, Sweden).
Nexus Index - what is it?
Nexus is a coefficient (0-1) determining what portion of IP income comes from your own R&D activities. The more R&D costs you incur, the higher the index. For developers conducting their own development work, it usually equals 1.0 (100%). Formula: n = (a+b)×1.3 / (a+b+c+d)
- a - own R&D costs
- b - R&D purchased from external companies
- c - R&D from related parties
- d - costs of acquiring finished IP
Qualified IP includes:
- Copyrights to computer programs
- Patents and utility models
- Industrial designs and semiconductor topographies
- Plant varieties and medicinal product rights
Requirements to use:
- Conducting R&D activities
- Creating or developing qualified IP
- Maintaining separate accounting records
- Cannot use with flat tax (only PIT/CIT)
⚠️ These are ESTIMATE calculations for informational purposes only.
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IP Box on 150,000 of software income: 7,500 in tax instead of 28,500
IP Box taxes income from qualifying intellectual property at 5% instead of 19% or the scale. A developer with 150,000 PLN a year of qualifying income on the flat tax pays 7,500 instead of 28,500. The catch is the nexus index, which shrinks the qualifying share when the R&D behind the IP was bought from related parties or the IP itself was acquired.
How it works
- Computes the nexus index from four categories of R&D spending and caps it at 1.
- Taxes the qualifying share of income at 5% and the rest at your usual form, the 19% flat tax or the 12% and 32% scale.
- Shows the tax with and without IP Box and the difference.
nexus = min(1, (a + b) × 1.3 / (a + b + c + d)) a own R&D · b R&D bought from unrelated parties c R&D bought from related parties · d IP acquired qualifying income = income × nexus tax = 5% × qualifying income + usual tax on the rest
Worked example
A developer earning 150,000 PLN a year from their own copyrighted software, then the same income with part of the R&D bought in.
- own work only: nexus 1, IP Box tax 5% × 150,000 = 7,500
- without IP Box on the flat tax: 19% × 150,000 = 28,500, so 21,000 saved
- on the scale instead: 20,400 without IP Box, so 12,900 saved
- a 40,000, b 20,000, c 30,000, d 10,000: nexus 60,000 × 1.3 ÷ 100,000 = 0.78
- 5% of 117,000 + 19% of 33,000 = 5,850 + 6,270 = 12,120, still 16,380 saved
The rate is fixed, the base is not. Anything that pulls the nexus below 1, typically work bought from a related company, moves part of the income back to the normal rate.
Reading the result
- Income here means income from the qualifying IP after the costs attributable to it, not revenue, and it must be recorded separately for each piece of IP in dedicated records. Without those records the relief is not available.
- IP Box is claimed in the annual return, not month by month. During the year advances are paid at the usual rate, and the saving arrives as a refund or a smaller final payment.
- The lump sum cannot be combined with IP Box, which is why the calculator offers only the flat tax and the scale.
- Whether a program is qualifying IP and whether the work counts as R&D is what an audit tests. Many developers obtain an individual tax ruling before claiming; the calculator assumes the answer is yes.
Common questions
- Who can use IP Box in Poland?
- Anyone earning income from a qualifying IP right they created, improved or developed through R&D work, most often programmers on B2B who own the copyright to their code and license or sell it. You must be on the flat tax or the scale, keep separate records for each IP, and claim the relief in the annual return.
- What is the nexus index and why is mine below 1?
- It measures how much of the R&D behind the IP you did yourself or bought from unrelated parties. R&D bought from related companies (c) and IP acquired outright (d) push it down; the 1.3 multiplier forgives some of that, and the result is capped at 1. A freelancer who writes their own code usually has a nexus of 1.
- Does IP Box lower ZUS or the health contribution?
- No. It changes only the income tax. Social ZUS stays the same, and on the flat tax the health contribution is still 4.9% of income calculated the normal way.