Global minimum tax – when in Poland?

Global minimum tax – when in Poland?

Global minimum tax – when in Poland?
The EU Council Directive of 14 December 2022 introduced a 15% minimum CIT tax, which will cover large capital groups operating within the European Union. The Polish government plans to adopt an act implementing EU regulations in the third quarter of 2024, so that they will enter into force in 2025.

Global minimum tax – main assumptions of the project

The project prepared by the Ministry of Finance is intended to implement into the Polish legal order the provisions of Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation of international enterprise groups and large domestic groups in the EU.

The Global Minimum Tax System (GloBE) assumes that each year the largest international enterprises will be checked whether they meet the requirement of a minimum 15% effective tax level.

Top-up tax will be imposed on an international group of companies or a large domestic group if the effective level of taxation of its income in a specific jurisdiction is below the so-called effective rate of 15%.

In Poland, the global minimum tax system is to be based on three types of top-up tax:

  1. global top-up tax
  2. national top-up tax
  3. tax on under-taxed profits

Minimum EU CIT - no Polish regulations

The deadline for implementing the provisions implementing EU minimum corporate income tax regulations expired on 31 December 2023. Poland has not fulfilled this obligation to this day. According to the government's announcement, the act implementing the regulations on minimum CIT is to be adopted in the second half of 2024.

Importantly, Polish companies that are part of international capital groups with revenues of at least EUR 750 000 000 may now be subject to this taxation. This will happen if the minimum CIT is already in force in the parent company's country.

The new global tax is a challenge for companies

As experts emphasize that the introduction of a new tax may, on the one hand, contribute to increasing state budget revenues and limit tax avoidance by large international companies, but on the other hand, the new obligation may be too complicated and burdensome for Polish enterprises.

Minimum CIT is in Poland since 1 January 2024

Since 1 January 2024, the previously suspended provisions on the minimum CIT tax, i.e. the so-called company tax, has been in force. Entities with a tax year equal to the calendar year will pay the new tax before the end of March 2025.

The minimum CIT tax applies to tax capital groups and companies that are CIT payers and which in a given tax year will incur a tax loss or will not exceed 2% break-even point. The new levy applies to entities operating on the Polish market, including foreign companies, if they operate through a foreign plant located in Poland.

At present, a very important step for many companies is to determine whether they are subject to the minimum CIT tax.

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Agata Nieżychowska
Agata Nieżychowska
Tax Director

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