A favourable tax ruling isn’t enough – tax authorities can still demand evidence for R&D relief

Many companies claiming the R&D tax relief focus primarily on establishing whether their activities meet the statutory criteria for research and development. In practice, something else is equally important – and often overlooked: holding documentation that genuinely proves such activity actually took place.

A ruling or overpayment claim is not the end of the road

Even a properly prepared overpayment application or a favourable individual tax ruling does not relieve the taxpayer of the obligation to demonstrate that the facts described actually correspond to reality. Tax authorities are entitled to verify the circumstances presented, and our practice shows they are exercising this right increasingly often.

What do tax authorities check?

As part of verification activities, tax audits or tax proceedings, officials may examine, among other things:

• project documentation,
• correspondence,
• work schedules,
• test results,
• protocols/minutes.

The purpose of such verification is to confirm that the taxpayer actually carried out activity with the characteristics of R&D activity, rather than merely declaring it in documents submitted to the authorities.

“In our practice, we increasingly see taxpayers treating a favourable individual tax ruling as the end of the matter. In reality, it’s only the first step – genuine protection for R&D relief comes from solid, ongoing project documentation that can demonstrate the actual course of the work, even years later when the authority comes knocking with an audit” – comments Łukasz Łebski, Director in the Grants and Incentives team at Thedy & Partners.

Check whether your documentation is secure

If you want to verify whether your company’s activities meet the criteria for R&D activity, and whether you hold documentation adequate to demonstrate this before the tax authorities, get in touch with our team. We will be happy to review your case and help assess the level of security of your R&D relief settlement.

Contact:
Łukasz Łebski – lukasz.lebski@thedy.pl
Szymon Miszkura – szymon.miszkura@thedy.pl
Karolina Nawrocka – karolina.nawrocka@thedy.pl