Creation and transfer of an innovative business

How to identify and manage tax and legal risks?

Are you developing, planning or running an innovative business? Be aware of the legal and tax challenges involved.

We believe that innovation processes happen in every business! You are constantly striving to develop your business and create attractive products and services. This inevitably leads to innovation. Therefore, you may need the help of experts in the field to properly identify, classify and manage the tax and legal implications of innovative activities.

How can we help?

It is worth reviewing the legal and tax aspects that will protect your business at each stage of its innovative activity (creation, R&D work, commercialisation, development, transfer or licensing of intellectual property rights). We have summarised below the main legal and tax areas to be analysed and for which we provide assistance.

Creating and developing intangible assets
Change in the existing settlement model
Group reorganization involving the transfer of an innovative business (or its part)
Tax Reliefs for companies and staff
Purchase / Sale of an innovative business to/from a third party
Legal and tax employee matters and optimal forms of cooperation

How can we help?

Benefits

Tax review of the methodology for recognizing expenditure on intangible assets and on research and development.
Ongoing advice on correctly recognizing expenditure on intangible assets and research and development works.
Verifying the classification of costs related to the development of innovative business for correctness from the perspective of the timing and method of recognizing individual cost categories (capitalization or ongoing recognition).
Tax review of valid contracts governing how costs are borne that are related to the development of innovative business and giving opinions on contracts planned.
Reviewing the adopted principles of tax amortization for intangible assets.
Correctness of settling costs related to the development of innovative business from the perspective of withholding tax (WHT) in the case of foreign counterparties, including:

Reviewing current WHT settlements, identifying possible risks and making recommendations,
Analyzing valid or planned contracts and classifying them from the WHT perspective as well making recommendations,
Verifying the completeness of documentation required to apply the exclusion, reduced rates or exemption from WHT,
Support in preparing or supplementing documentation necessary to apply the exclusion, reduced rates or exemption from WHT,
Support in developing and implementing a due diligence procedure for WHT purposes.

Verifying the employment model in place, indicating possible risks in the field of PIT and social security (ZUS), assessing the risk of reclassification of B2B contracts into employment contracts and making recommendations.
Support in obtaining individual interpretations to confirm specific tax aspects - for planned and historical events.
Support in limiting or eliminating risks identified in the above scope.
Legal recommendation to assess whether it is more economically beneficial to publish or implement? Developing good practices regarding the confidentiality of scientific research results.
Drafting and developing further strategy for filing a technical solution with the Patent Office of the Republic of Poland, the European Patent Office.
Privacy and Cybersecurity.

Eliminating or reducing historical risks related to the costs of creating and developing existing intangible assets.
Listing rules, developing policies and procedures and support in their implementation to eliminate tax risks in the future.
Optimizing expenses in tax settlements by applying adequate reliefs or deductions and optimizing revenues related to intellectual property.

How can we help?

Benefits

Analyzing tax effectiveness of the planned changes, including WHT settlements (in the case of cross-border payments), with an indication of the risks, available alternatives and recommendations for each option.
Tax analysis of draft contracts and other documentation underlying the planned change of the settlement model.
Analyzing tax effects of settlements in the transitional period, recommendations included.
Analyzing the business justification for the planned changes in the context of possibly applying anti-abusive clauses (in particular GAAR).
Support in compiling documentation to justify the planned changes from the business perspective in the form of the so-called ‘defense file’.
Analyzing planned changes and listing possible reporting obligations under the Mandatory Disclosure Rules.
Support in meeting any obligations under MDR.
Support in obtaining individual interpretations to confirm specific tax aspects - for planned and historical events

Ensuring tax effectiveness of changes in the settlement model based on the analysis of available alternatives.
Compiling documentation to justify changes made from a business perspective to be used in the event of a possible dispute with the tax authorities.
Identifying and meeting any reporting obligations that may result from the planned/implemented changes.
Optimizing expenses in tax settlements by applying adequate reliefs or deductions and optimizing revenues related to intellectual property.

Transfer Pricing

Identifying post-transfer settlements from TP perspective.
Proposals/scenarios for intra-group settlements concerning intangible assets and other types in the new cooperation model – to be safely implemented from TP perspective.
Establishing arm’s length remuneration in intra-group settlements.
Preparing TP policy for the intra-group settlement methodology selected.
Analyzing the functional profiles of entities, the scope and specifications of cooperation from TP perspective.
DEMPE analysis, i.e. determining those responsible for and bearing the costs related to DEMPE functions (development, enhancement, maintenance, protection and exploitation of intangible assets).
Analyzing the planned transaction in terms of legitimacy and business substance from TP perspective.
Verifying / drafting agreements between related entities in the area of cooperation and settlement methodology from TP perspective.
Identifying potential TP risks resulting from contractual provisions.
Verifying compliance of contractual provisions with the actual course of the transaction.

How can we help?

Benefits

Analyzing tax effectiveness of the planned transfer, including WHT settlements (in the case of cross-border payments), with an indication of the risks, available alternatives and recommendations for each option.
Assessing transaction reclassification risk from the perspective of labeling transferred assets as individual assets or transfer of an enterprise / organized part of an enterprise.
Analyzing tax implications involved in possible transfer of financial contracts.
Tax analysis of draft contracts and other documentation underlying the planned transfer.
Tax advisory on settlements in the transitional period.
Analyzing the business justification for the transfer in the context of possibly applying anti-abusive clauses (in particular GAAR).
Support in compiling documentation to justify the transfer from the business perspective in the form of the so-called ‘defense file’.
Analyzing planned changes and listing possible reporting obligations under the Mandatory Disclosure Rules.
Support in meeting any obligations under MDR.
Support in obtaining individual interpretations to confirm specific tax aspects.
Contract consulting, reviewing and drafting contracts, due diligence analysis of valid contracts governing the cooperation between research centers and enterprises.
Non-disclosure agreements.
Drafting and negotiating license agreements for intellectual property and technology.
Technology transfer, cooperation, sponsorship, research services, production, supply and distribution.
Drafting template licenses for intellectual property to be used within corporate groups and advice on structuring intellectual property in consultation with tax advisors.
Agreements regarding the assignment, sale or purchase of IP assets.
Registration of assignments of patents, trademarks, registered designs and plant breeders' rights.
Terms of use for websites.
Choice of law and cross-border enforcement.
End User License Agreements.
Franchise documentation.
Developing patent information management strategy

Ensuring tax effectiveness of the reorganization based on the analysis of available alternatives.
Compiling documentation to justify the reorganization from a business perspective to be used in the event of a possible dispute with the tax authorities.
Identifying and meeting any reporting obligations that may result from the planned/implemented changes.

Transfer Pricing

Identifying business operations that make up the business transfer and their analysis from TP perspective.
Verifying whether the planned transfer of business fits the definition of restructuring within the meaning of transfer prices, including support in the calculation of the expected EBIT (assuming restructuring and no restructuring cases).
Support in analyzing realistically available options related to the planned transfer.
Identifying potential tax and legal risks related to business transfer.
Analyzing the planned transfer to a related entity in terms of the exit fee legitimacy, along with recommendations from TP perspective.
Calculating the exit fee.
Identifying potential TP risks related to the exit fee or its lack.
Identifying all planned settlements involved in providing or transferring intangible assets from TP perspective.
Listing proposals / scenarios for intra-group settlements in the new model of cooperation (after the business transfer) and the level of remuneration that is safe to be implemented from TP perspective.
Preparing benchmarking analyzes to establish the rm’s length remuneration in settlements regarding intangible assets.
Identifying reporting obligations for restructuring transactions and intra-group settlements under the new cooperation model (after the business transfer).
Compiling the Local File for enterprise restructuring transactions.
Compiling defense file documentation with business justification for the restructuring.
Compiling Master File.
Preparing benchmarking analyzes for transactions made after the restructuring.
Preparing TP-R form to report transactions constituting the restructuring of the enterprise and transactions made after restructuring.

Implementing 50% tax deductible costs

How can we help?	Benefits
Verifying whether the preferential 50% tax deductible costs regime may apply to employees: taking into account the nature of business operations, the scope of employees' duties and the outcome of their work. Defining the terms and conditions for applying the preferential 50% tax deductible costs regime. Assistance in implementing and preparing appropriate documentation for the remitter.	Higher remuneration for employees without raising the gross amount -> greater competitiveness on the labor market/greater incentive for staff. Potential benefits for the employees:

Research and development relief

How can we help?	Benefits
Identifying research and development processes and processes eligible for the relief. Identifying eligible costs. Record keeping recommendations. Requests for individual interpretations to secure doubtful issues. Reviewing or preparing calculations together with tax returns. Compiling documentation to confirm the solutions adopted.	Deducting eligible costs from the tax base, e.g. in the case of employee costs, they reduce the tax base three times in total. Securing and confirming the correctness of settlements through a report and formal tax opinions. Support in the current operations in a way that facilitates the settlement of the relief after the end of the tax year.

Polish Investment Zone

How can we help?	Benefits
Identifying activities that may potentially be covered by the decision on support. Preparing an application for a decision on support. Identifying and verifying eligible costs. Preparing the decision on support to be signed off by identifying revenues from exempt and taxed activities, developing cost allocation keys for exempt and taxed activities.	Tax exemption on new investment income as an additional result.

Purchase

How can we help?

Benefits

Tax advisory on setting up the optimal transaction structure (acquisition under a ‘share deal’, an ‘asset deal’ or a ‘business deal’).
Analyzing the optimal form of financing the planned transaction (equity, debt or alternatives).
Performing a comprehensive tax due diligence to identify tax risks related to the acquired business.
Finding optimal ways to address the identified risks in the context of the planned transaction through appropriate provisions in the transaction documentation or alternative forms (insurance, risk mitigation before the transaction, inclusion in the price).
Support in negotiations with the seller’s advisers.
Tax review of transaction documentation at every stage (SPA, APA, Investment Agreement).
Support in the field of tax settlement of the transaction and filing all tax statements/information required.
Support in integrating the acquired business into the investor’s ownership structures.
Analyzing and advising in the field of research work offers for the needs of enterprises.
Buyer due diligence.
Drafting agreements for the transfer of intellectual property rights or license agreements.
Assignment of applications or rights from the registration of intellectual property.

Securing the buyer’s interest by identifying tax risks involved in the acquired business and addressing them appropriately.
Identifying tax-effective scenario for the acquisition and continued operation of the business.
Comprehensive transactional support at every stage of the transaction.

Sale

How can we help?

Benefits

Tax advisory on setting up the optimal transaction structure (sale under a ‘share deal’, an ‘asset deal’ or a ‘business deal’) to secure the sale is tax efficient for the seller.
Advisory on tax consequences involved in the repayment, refinancing or takeover of a debt.
Preparing a tax vendor due diligence study to identify potential tax risks before the transaction and arrange the transaction accordingly.
Alternatively, preparing a tax fact book - a study of the general tax situation of the sold business.
Listing optimal ways to address the identified risks in the context of the planned transaction.
Support in the implementation of solutions to eliminate / reduce identified risks.
Support in negotiations with the buyer's advisers.
Tax review of transaction documentation at every stage (SPA, APA, Investment Agreement).
Support in the field of tax settlement of the transaction and filing all tax statements/information required.
Vendor due diligence.
Negotiating and giving opinions on contracts.

Opportunity to address tax risks related to the business being sold before the transaction and prepare for talks with the buyer.
In the case of making the vendor due diligence study or preparing a tax fact book - demonstrating the seller’s transparency and significantly relieving the team of expected obligations related to the due diligence processes of the buyer (or buyers).
Determining the preferred form of business sale from the seller’s perspective.
Comprehensive transactional support at every stage of the transaction.

How can we help?

Benefits

Making a legal and labor audit of the transferred business.
Analyzing the scope of business transfer in terms of the transfer of the workplace or its part to a new entity.
Advising on the transfer of a workplace or its part as part of the transfer of an innovative business to a new entity - support in fulfilling the employer’s information obligations, transfer of employee obligations.
Support in defining the rules of cooperation between entities involved in business transfer in the field of legal and employment matters - developing appropriate contracts between entities.
Advising on the harmonization of employment conditions of the acquired employees.
Advice on non-competition agreements for staff and contractors.
Advice on business reorganization to ensure business continuity.
Consultancy in establishing the rules of hiring employees / contractors and forms of cooperation with them.

Securing business continuity by properly identifying the departments/employees who will be covered by the business transfer.
Ensuring an appropriate form of cooperation between the entities affected by the transfer of innovative business.
Minimizing the risks involved in changing the entity employing staff of a given business,
Securing the interests of the entrepreneur and limiting the possibility of undertaking additional activities by business employees.
Ensuring smooth cooperation and consistent employment conditions for employees taken over as part of a business transfer.
Implementing the most efficient and cost-effective structure for cooperating with staff