The Management Board of LiveChat Software informs that on October 22, 2019, it received an "Individual Interpretation" of tax law provisions regarding corporate income tax and issues related to preferential taxation of income generated by intellectual property rights.
In the issued interpretation, the Director of the National Tax Information stated that the Company's position regarding the interpretation of tax law provisions regarding corporate income tax in the scope of:
- Determining whether the Company's products (applications) described in the actual state constitute qualified intellectual property rights within the meaning of art. 24d paragraph 2 of the CIT Act (question No. 1) - is correct;
- Determining whether the Company's income from a particular application will constitute the income from the qualified intellectual property right referred to in art. 24d paragraph 7 of the CIT Act, for which 5% CIT rate may apply, as income from qualified intellectual property right included in the sale price of the service (question No. 2):
- If the monthly subscription is only a fee incurred by the user for the right to use the application - it is correct.
- If extended product support is offered as part of the highest subscription, including IT support, product training, a dedicated Key Account Manager - it is incorrect,
- Presented calculations according to the Nexus formula referred to in Art. 24d paragraph 4 of the CIT Act (question No. 4) - are correct.
The company indicates that the facts presented in the application concerned the products: LiveChat, ChatBot, and HelpDesk.
The company also asked the question:
"Does the factual way of keeping records by the Company described in the actual state meet the requirements referred to in art. 24e of the CIT Act? "
A separate decision will be issued in this respect.
As a result of receiving Individual Interpretation, the Company will start work on assessing the extent to which the application of the tax preference will affect its net profit while awaiting the settlement of the question regarding its record keeping.