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Minimum income tax is approaching

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​Anna Harasimowicz, Katarzyna Niedabylska

16 November 2023


The two-year suspension of the minimum income tax legislation is going to end in January 2024.

This means that there will be a completely new charge to be paid by CIT payers in Poland. 
 

Minimum tax – how does it work?

 
The minimum income tax is payable by companies (of all sizes) and corporate groups which incur a loss from revenue sources other than capital gains or achieve a profitability for tax purposes (share of net income in revenues other than capital gains) not exceeding 2% in a tax year. 
 
The tax rate is generally 10% of the taxable base consisting of several components. Alternatively, the taxpayer may opt for a simplified determination of the taxable base at 3% of revenues other than capital gains. In addition, taxpayers will be entitled to reduce the taxable base by, among others, reliefs ( such as R&D relief) or exemptions related to carrying out business activity in a special economic zone (SEZ) or in the Polish Investment Zone (PIZ). 
 

Who does the regulation apply to?

 
Generally, all CIT payers are obliged to verify their tax profitability and pay minimum tax (if due). However, the law provides for a number of exemptions. 
 
The exemption applies, for example, to financial companies, start-ups, small taxpayers and entities that have concluded a cooperative compliance agreement with the head of the National Revenue Administration. 
 
In addition, certain categories of revenue and tax-deductible costs have been excluded from the regulation. 
 
As a result, in the course of verification, it may turn out that the taxpayer is not liable to minimum tax. 
 
It is also worth bearing in mind that the minimum income tax legislation has changed significantly during the suspension period. Therefore, those who have made an initial analysis of whether their business is subject to minimum tax should once again review the findings. 
 
Although the tax will not be due until 2025, given the level of complexity of the legislation and the fact that there are many overlapping obligations, it is worth preparing in advance for the upcoming changes. 
 
At Rödl & Partner, we help identify the new obligation, provide support in the implementation of internal tax procedures and timely payment of tax. If you would like to know more on the minimum tax, you are welcome to contact us.

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Anna Harasimowicz

Auditor (Poland)

Associate Partner

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Katarzyna Niedabylska

Tax adviser (Poland), Attorney at law (Poland)

Senior Associate

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