In July last year, we informed that the tax authorities had redefined their previously presented approach to interpreting the concept of “total working time” for the purposes of the innovative employees relief.
Several months have passed, and the tax authorities have now presented another change in their interpretation of how the relief should be applied. This time, the issue concerns the period for which the relief may be used.
How does the relief mechanism work?
Under the applicable provisions, the right to apply the relief arises from the month following the month in which the taxpayer filed its annual tax return and continues until the end of the tax year.
The relief operates in such a way that the employer retains PIT advances withheld from the remuneration of innovative employees qualifying for the relief, instead of remitting those advances to the tax office, up to the amount of the available relief.
Where does the interpretative uncertainty arise?
The provision does not clearly specify whether it refers to:
Option I (the month of payment to the tax office):
PIT advances whose deadline for remittance to the tax office falls in the month from which the right to apply the relief arises, i.e. from the month following the filing of the annual tax return; or
Option II (the month of withholding / remuneration):
PIT advances withheld from remuneration paid in the month from which the right to apply the relief arises, i.e. from the month following the filing of the annual tax return, even if their payment to the tax office takes place only in the following month.
Example
Let us assume that the taxpayer filed the annual tax return for 2024 in February 2025.
Under the provision, the right to apply the relief is available from March 2025.
Payroll and PIT advance timeline
- In February 2025, remuneration for February is paid and PIT advances are withheld. The deadline for remitting those advances to the tax office falls on 20 March 2025.
- In March 2025, remuneration for March is paid and PIT advances are withheld. The deadline for remitting those advances to the tax office falls on 20 April 2025.
Option I – relief “from March” applied to advances payable in March
Under this approach, the decisive factor is that the right to apply the relief starts from March, so the remitter may retain those advances that it would normally pay to the tax office in March.
Effect:
The company may start applying the relief already in March 2025 by retaining the advances withheld from February remuneration, whose payment to the tax office falls on 20 March.
In other words: the relief starts in March and covers advances that are normally paid in March, although they relate to February remuneration.
Option II – relief only with respect to advances on March remuneration, i.e. “effectively” from April
Under this approach, the decisive factor is that the right to apply the relief exists from March, so the remitter may retain only those advances that were withheld from remuneration paid in March.
Effect:
The first “relief” advances will come from March remuneration, and their payment deadline to the tax office falls on 20 April. In practice, this means that the company will beneft form the relief starting in April 2025.
In other words: the relief starts in March, but covers advances withheld in March, which are payable in April.
Summary
Option I: the first retained advances – already on 20 March, i.e. advances from February remuneration.
Option II: the first retained advances – only on 20 April, i.e. advances from March remuneration.
Until now, it seemed that the tax authorities had presented a consistent position confirming the correctness of Option II. In practice, this meant postponing the possibility of the “first” use of the relief by one month, with the first benefit arising only in the following month, together with the deadline for payment of the advances.
In recent months, however, we have observed that the tax authorities have started to present a different position, favoring Option I – i.e. actual use of the relief already from the month following the month in which the annual tax return was filed.
Such a position was expressed by the Director of the National Revenue Information, among others, in the individual tax ruling of 5 January 2026, ref. 0111-KDIB1-3.4010.607.2025.2.MBD.
The tax authority explained that:
The right to deduct the innovative employees relief will apply with respect to advances for personal income tax starting from the month following the month in which the taxpayer files the annual tax return, i.e. with respect to advances for personal income tax payable to the tax office in the month immediately following the month in which the CIT return was filed.
Finally, the authority also referred to the final period of applying the relief, explaining that the last month of the taxpayer’s tax year is also the last month in which the innovative employees relief may be applied with respect to PIT advances withheld from remuneration – but only those that will be payable to the tax office in that month.
Practical consequences of the change
On the one hand, the change in the approach of the tax authorities allows the taxpayer to benefit from the tax preference earlier.
On the other hand – under this understanding of the provisions – the period of applying the relief is shortened. The PIT advance from remuneration for the last month of the tax year is paid to the tax office in the first month of the following tax year. Consequently, following the logic of Option I, such an advance cannot be covered by the preference under this model.
As can be seen, the change in interpretation should generally not have a significant impact on the total amount of relief that may be settled, although it may change the timing of its use from a cash flow perspective and the manner of settlement at the turn of the tax year.
However, where significant amounts are involved, it is worth considering securing the model of applying the relief adopted by the company by obtaining an individual tax ruling, as the practice in this area remains unstable.
Michał Solarski
Manager
