This preference has been in effect for PIT tax purposes since January 1, 2022, and allows entrepreneurs to deduct a portion of costs related to trial production of a new product and its market introduction.

What is the prototype relief?

This relief covers expenses for:

• trial production of a new product – a phase of the technological process that does not require further development work and allows for testing before commencing actual production,
• market introduction of a new product – activities related to the preparation of documentation, certificates, and permits necessary for further sale of the product.

Scope of the tax relief

The relief allows entrepreneurs conducting non-agricultural business activity to deduct 30% of costs for trial production and market introduction of a new product. However, this deduction cannot exceed 10% of income earned from business activity in a given tax year.

Entrepreneurs may include incurred expenses both as current business costs and deduct them from the tax base in their annual tax return.

Rules for settling the relief

• The relief is available provided that the expenses were actually incurred and have not been reimbursed in any form.
• If the taxpayer reported a loss or their income is lower than the deduction available to them, the unused relief can be deducted over the next six years.
• The deduction is not possible at the stage of calculating tax advances – it is applied only in the annual PIT return.

Catalog of expenses eligible for the relief

Costs of trial production of a new product:

• purchase or production of factory-new fixed assets necessary to launch trial production (groups 3–6 and 8 of the Classification of Fixed Assets),
• improvements to existing fixed assets necessary to adapt them for trial production,
• purchase of materials and raw materials used exclusively in trial production.

Costs of introducing a new product to the market:

• tests, expert opinions, assessments, certificates, homologations, and other documents required for product market authorization,
• product life cycle studies,
• environmental technology verification mechanisms.

The prototype relief is a beneficial solution for entrepreneurs developing innovative products. It allows for the recovery of a portion of costs incurred for trial production and the certification process. However, it is important to remember that the relief applies only in specific cases and covers only the expenses specified in the PIT Act.