New tax reliefs for companies in 2021

In 2021, the new regulations introducing tax preferences for companies will come into force. From 1 January 2021, a larger number of entrepreneurs will be able to opt for lump-sum taxation on recorded revenue, as the list of services for which such taxation is not possible will be removed, and the limit of income enabling this form of taxation will be increased as much as eight times.

From the middle of the year a new relief for robotisation and prototype is to come into force, and together with the relief for R&D and IP Box, they are to increase the innovation of the Polish economy. Under these solutions, entrepreneurs will deduct 50% of the costs of purchase or leasing of robots, software, cobots accessories and necessary trainings for employees.

Lump sum as from January 2021

A lump sum on recorded revenue is a simplified form to tax business activity. This form of taxation may be used by natural persons conducting sole proprietorship, civil partnership or general partnership.

As from 1 January 2021, more such entrepreneurs will be able to decide on a lump sum settlement on recorded revenue, because the following changes will be introduced:

• the limit on revenue to qualify for the lump sum will increase from EUR 250 000 to EUR 2 million
• the restrictions on the use of the lump sum for the freelance professions will be lifted; after changes, this option will be open inter alia to tax advisers, accountants, lawyers, notaries, solicitors, architects, civil engineers, psychologists and physiotherapists.

Moreover, the highest lump sum rates will be reduced:

• from 20% to 17% on revenue generated by the freelancers
• from 17% to 15% on revenue from the supply of certain services, for example advertising, cultural and entertainment, architectural and engineering, financial and insurance (other than provided by for freelancers).

From 2021 the lump sum taxation on recorded revenue will also be available to entrepreneurs who lease real estate. Until now, this form was allowed only in the case of private lease.

If an entrepreneur chooses a lump sum on the lease, he will pay tax on the total revenue, without reducing it by tax-deductible costs, such as: depreciation, renovation costs, loan interest, expenses related to the maintenance of the leased property.

9% CIT for businesses

In 2021, more entrepreneurs will benefit from the reduced CIT rate, which is 9% instead of the basic 19%. This is the result of raising from EUR 1.2 million to EUR 2 million the threshold to which this preference can be applied.

Reduced CIT - which companies can benefit?

From 2021 the rate of 9% CIT will apply to entrepreneurs:

• starting a business (in the first year of operation), or
• having the status of a small taxpayer (i.e., revenue from the previous tax year below EUR 2 million),

but only if the entrepreneur's revenue does not exceed the equivalent of EUR 2 million during the year.

The entrepreneur will therefore pay 19% if from 2021 the revenue limit of the equivalent of EUR 2 million is exceeded during the year.

However, it should be remembered that the principle according to which the 9% rate cannot be applied if the company was established by restructuring (for example the division of an existing company), by transforming a company of a natural person or a company that is not a legal person into another type of activity, or if a company (part of it or its assets) with a value of more than EUR 10 000 was contributed to the company is still in force.

It is important to note that the 9% rate applies only to income from operating activities, and income from capital gains is subject to a 19% rate.

Relief for robotisation

In 2021 there will also be a new relief for robotisation. According to the announcement, it will primarily cover the purchase of new industrial robots and the software needed for their operation.

Any company will be able to enjoy the relief, regardless of its size and type of industry and form of taxation: PIT/ CIT. The new deduction is to be valid for five years, i.e., until the end of 2025.

The relief for robotisation provides for a deduction of 50% of the tax-deductible costs incurred for:

• purchase or leasing of new robots and cobots,
• purchase of software,
• purchase of accessories (e.g., running tracks, rotors, controllers, motion detectors, final effectors),
• purchase of occupational health and safety (OSH) equipment,
• trainings for employees who will operate the new equipment.

These costs will be deductible by the entrepreneurs during the tax year, and at the time of submitting the annual tax return, they will make an additional deduction (as in the case of R&D relief).

The relief for robotisation has been developed on the pattern of the relief for R&D and IP Box, and its introduction is to increase entrepreneurs' interest in investments in robotisation.

The new tax relief is expected to take effect from mid-2021.

Relief for a prototype

The relief for a prototype is to be an extension of the tax package supporting innovation and productivity within a multi-element system of simultaneous tax reliefs. 

According to the Ministry of Finance, the new tax preference "will support the transfer of a certain idea into practice and production", and the detailed solutions for a prototype relief will be presented to entrepreneurs at the turn of January and February 2021.