A few changes in Polish tax law are being prepared to be introduced from 2019. Unfortunately, they are included in different bills, so following them is kind of difficult.
A new bill has been prepared by Ministry of Culture and National Heritage – bill on financial support for game developers. The bill includes tax incentives for developers of “cultural video games”.
The bill requires that the developer has its seat in Poland and has at least one game published and that the game has been in commercial distribution for at least 3 months before the developer applies for the financial aid.
Also for foreign companies
Foreign companies may also apply for the aid, if they are located in a country of EU or EFTA and they have a branch in Poland – in such case the experience requirement applies to the branch and the aid may only be applied to a game that is developed by the branch.
Aid as tax deduction – incentive for those that would pay income tax
The aid would be given as a right to deduce 100% of the costs related to the development of the game and specified in the bill (qualified costs) from the tax base. The qualified costs must amount not less than PLN 100.000,00 and the whole amount of public aid given for the development of the game cannot exceed 50% of the production costs. The right for the deduction shall be given for 3 years, with possibility of extension for two years.
This means that the incentive will only work for projects that will generate tax income.
The definition of the “cultural video game” is rather broad so it hopefully will not limit the creativity of the developers.
The aid may be granted to any video game that uses Polish or European cultural heritage, has “culture-building” or innovative character and is created for commercial distribution.
Location of development
The game would have to be developed in Poland and Polish or European specialists would have to be involved in the development.
Verification of the abovementioned conditions will be done as so called “qualifying test” during which the most points will be given for using Polish cultural heritage and culture-building or innovative character of the game. Games that have promotional character, are related to gambling or include pornography will not qualify.
Verification will be done by the Minister of Culture and National Heritage.
The lawmakers aim at helping Polish game developers. Similar regulations have been introduced in many other countries and even more consider to introduce them.
Together with the so called “Innovation Box” regulations (that concern tax incentives for businesses that profit from development and distribution of innovative technologies) it may make Poland more attractive as a location for establishing creative businesses.