Intangible assets in the Polish Investment Zone: does the involvement of a related party in the acquisition disqualify an eligible cost?

When it comes to intangible assets in the Polish Investment Zone, entrepreneurs typically focus on a single question: whether a given licence, know-how, or software can constitute an eligible cost at all.

This is, of course, an important question – but in practice, the specific conditions that apply to intangible assets are equally consequential. And it is very often these conditions that ultimately determine whether a given expenditure holds up in the context of state aid reporting.

It is worth bearing in mind that intangible assets must, among other things: be connected to a technology transfer; be subject to amortization; be used exclusively at the facility covered by the support decision; remain on the books of that facility for the required period (which varies depending on the size of the enterprise); and their share of total eligible costs must not exceed 50% – a condition that applies to large enterprises.

One of the most interesting  (and at the same time most problematic) conditions is the requirement that the assets be acquired on market terms from an unrelated third party. It is this condition that generates the greatest number of questions.

The problem begins where a corporate group enters the picture

In commercial practice, it is very common to encounter a model in which one group company centralizes the procurement of technology. That entity negotiates the contract with the supplier, concludes the framework agreement, determines the number of licences or the scope of the solution, and then recharges the costs to the individual group companies using the relevant tool.

From a business perspective, this arrangement is entirely rational. It facilitates implementation, strengthens the group’s negotiating position, and streamlines the procurement process.

From the Polish Investment Zone’s perspective, however, a question arises: given that a related party is involved throughout the model, can one still speak of an acquisition from an unrelated third party?

In my view, the answer should not be automatic.

Not every involvement of a related party constitutes a problem

In cases of this nature, it is worth distinguishing between two scenarios.

The first is relatively straightforward: the related party itself sells the solution, sub-licences it, or otherwise acts as the actual supplier of the intangible asset. In such an arrangement, the risk is clear, since it is difficult to look past the literal requirement of acquisition from an unrelated third party.

The second scenario is more complex. The related party neither creates the technology nor is its beneficial owner; rather, it performs an intermediary function — centrally contracting the purchase, aggregating demand from the group’s constituent entities, and subsequently recharging the cost to the relevant parties.

And it is precisely here that the mere involvement of a related group company should not, in itself, be regarded as determinative of a negative outcome.

What matters in practice

In such cases, what is more important than the formal flow of documentation is the economic substance of the transaction as a whole.

In my view, five issues are of decisive importance.

First, who actually transfers the right to use the intangible asset. If the technology originates from an external, unrelated supplier, and the group company merely facilitates the purchase, the situation is fundamentally different from an intra-group sale.

Second, who ultimately bears the economic burden of the expenditure. If the cost is ultimately borne by the company implementing the new investment – and it is that company which uses the solution at the facility covered by the support decision – this is a significant argument from a practical standpoint.

Third, whether the rights to use the software are in fact assigned to the specific company and exercised by it independently. The question is not solely one of contractual structure within the group, but whether in practice the relevant company uses the licence in its own right, for the purposes of its own facility, and separately from the other group entities.

It is also relevant who actually makes decisions regarding the scope of use of the licence – in particular, with respect to the number of users, the renewal of the agreement, or the decision to discontinue its use. If these decisions rest with the company using the intangible asset, this strengthens the argument that it is that company which effectively holds the right to use the software.

Fourth, what is the actual role of the company acting as coordinator – whether it is limited solely to organizing the purchase and managing the recharge, or whether it effectively assumes the economic function of a technology supplier within the intra-group model. This distinction is material, because only in the former scenario can one argue that the condition of acquisition from an unrelated party has been preserved.

Fifth, whether the terms of the transaction are at arm’s length. Without this, it is difficult to speak of a defensible approach at all.

Where caution is warranted

An important caveat is necessary here: this approach does not mean that every intra-group recharge automatically “saves” the position.

That would be too broad a conclusion.

Such a position can only be defended where the documentation genuinely demonstrates that:

• the source of the technology is an unrelated party,
• the terms reflect market conditions,
• specific rights are assigned to the relevant entity, and
• the role of the related party is ancillary, organizational, or administrative in nature.

The more a related party begins to act as an independent supplier of the solution, the greater the risk that the relevant authority will take a different view of the transaction.

Why this issue is becoming increasingly important

In new investment projects, the value of the project increasingly extends beyond the production hall, the warehouse, or the machinery. Today, a company’s competitive advantage is also shaped by ERP systems, logistics solutions, planning tools, data workflow automation, and operational know-how.

This means that in the context of the Polish Investment Zone, what matters is no longer solely the physical infrastructure, but also the correct structuring of intangible technology assets. And in this area, errors most commonly arise not from the provisions themselves, but from an insufficiently considered documentation model.

Conclusion

In my view, the mere fact that a related party is involved in the acquisition of intangible assets should not automatically disqualify the expenditure from eligibility under the Polish Investment Zone.

What is decisive, rather, is whether the actual supplier of the technology is an unrelated party, whether the terms are at arm’s length, who genuinely acquires the right to use the solution, and whether the intangible asset is in fact connected to the facility covered by the support decision.

In practice, this is yet another illustration of the fact that in the Polish Investment Zone, the formal structure alone is not always determinative. Very often, what matters most is the economic and legal substance of the transaction.