Tax relief in the construction industry. Not just for tech companies

The construction industry is rarely associated with tax reliefs for innovation. In practice, however, many companies operating in this sector particularly those engaged in manufacturing can benefit from the preferential treatment provided for in the CIT and PIT Acts. This applies in particular to companies producing building materials, structural elements, construction chemicals, machine components or other products used in construction processes, but also firms to carrying out complex construction projects.

For such entities, tax reliefs can be a practical tool for reducing their tax burden, rather than merely a solution available to companies in the new technologies sector.

R&D tax relief – potential in day-to-day operations
The most important instrument worth considering is the research and development tax relief. It can be applied when a company is developing new, improved or modified products, processes or production technologies.

In the construction industry, research and development activities occur more frequently than one might think. They include both work on new or significantly improved building materials, technologies and products, and the development of innovative technical, design and construction solutions used in the implementation of construction and infrastructure projects. Examples of such activities cover work on new formulas for building materials, improving the technical properties of construction chemicals, increasing the durability of concrete, gypsum or cement products, modifying structural elements, or adapting products to new technical and market requirements. Projects of this kind require the conduct of analyses, research, testing and verification of the adopted assumptions under conditions of technological uncertainty, and result in the acquisition of new knowledge and the creation of solutions that address specific technical, operational and environmental challenges.

Importantly, to qualify for the R&D tax relief, it is not necessary for the work to result in commercial success. Nor is it necessary to develop a breakthrough solution on a market-wide scale. It may be sufficient to develop a solution that is new or improved from the perspective of the company in question.

This is important because many manufacturing firms in the construction sector are constantly improving their products, testing new raw materials, altering product specifications or optimising manufacturing processes. Some of these activities may meet the criteria for research and development.

What are the benefits of the R&D tax relief?
The R&D relief mechanism allows for an additional deduction of eligible costs from the tax base. This means that certain expenses may first be recognised as standard tax-deductible costs and then additionally deducted under the relief.

In practice, this can result in a very significant tax benefit. The additional deduction is generally 100% of eligible costs, and in certain cases as much as 200%, for example in relation to staff costs or for taxpayers with research and development centre status.

Costs that may be eligible for deduction include, amongst others, employees’ salaries together with social security contributions, expenses on the purchase of materials and raw materials directly related to R&D activities, depreciation write-offs on fixed assets and intangible assets, the costs of obtaining a patent, as well as expert reports, opinions and consultancy services provided or carried out by scientific institutions.

From the perspective of construction firms, the possibility of including the costs of materials and raw materials used in development work may be particularly significant. In manufacturing, these are often among the most significant cost positions.

Tax interpretations confirm the sector’s potential
The practice of the tax authorities confirms that the R&D tax relief may also apply in the construction and construction-related sectors. In individual interpretations, the authorities have accepted the possibility of claiming the relief in activities relating to, amongst other things, the manufacture of construction machinery, components for construction machinery, construction chemicals, structural elements, and products made of concrete, gypsum or cement.

However, this does not mean that every manufacturing activity automatically qualifies for the relief. It is necessary to analyse specific projects, the way they are carried out, the purpose of the work and the costs incurred. It is also crucial to document the activities properly so that, in the event of an audit, it can be demonstrated that they met the conditions for research and development activities.

An unused relief does not have to be forfeited
It sometimes happens that a company is unable to fully claim the R&D relief in a given year, for example due to insufficient income. In such cases, the unclaimed amount can, as a general rule, be carried forward to subsequent tax years.

An additional option is the tax relief for innovative employees. This allows CIT or PIT taxpayers who have not fully claimed their R&D tax relief to reduce the PIT advance payments deducted from the salaries of specific individuals involved in R&D activities.

The condition is that the individual in question must devote at least 50% of their total working time in a given month directly to carrying out research and development activities. For companies undertaking larger development projects, this can be a practical way of utilising the tax benefit more quickly.

The robotisation of production may also offer tax benefits
Companies in the construction sector that carry out manufacturing activities and invest in automation should also consider the robotisation relief. This scheme allows for an additional deduction of 50% of eligible costs incurred for robotisation.

This may be relevant for businesses that are modernising production lines, implementing industrial robots, peripheral equipment or solutions that increase process automation. In an industry where labour costs, pressure for efficiency and quality expectations are rising, robotisation is increasingly becoming not only a technological investment but also a source of competitive advantage.

Importantly, this relief applies to costs incurred up to the end of the tax year commencing in 2026.

Expansion relief – support for companies growing their sales
A separate tax relief measure that may be of significance to companies in the construction sector is the expansion relief. This applies to costs incurred with the aim of increasing revenue from the sale of products.

In practice, these may include, amongst other things, expenditure on promotion, marketing, participation in trade fairs, the preparation of promotional materials, or activities supporting the launch of a new product onto the market. Expenditure of this kind is common in the construction sector, particularly amongst companies developing sales of new products, seeking new markets, or strengthening their brand position.

The expansion relief allows certain costs to be deducted up to a limit of 1,000,000 złotys a year. For companies actively investing in sales growth, this can be a significant addition to their standard tax return.

Tax relief as part of a business strategy
In many companies within the construction sector, tax reliefs are still not treated as a natural part of financial planning. This often stems from the belief that tax incentives for innovation mainly apply to the IT, pharmaceutical or high-tech sectors.

Such an approach may result in real tax savings being missed out on. The production of building materials, the development of new products, the testing of raw materials, the improvement of product specifications, process automation and expansion into new markets are all areas that may qualify for the relief mechanisms provided for under CIT and PIT legislation.

However, proper preparation is key. Before applying any tax relief, it is essential to verify whether the activity in question and the costs incurred meet the statutory conditions. It is also worth ensuring that projects, costs and employee involvement are properly documented.