On 8 September 2021, a draft bill amending the Personal Income Tax Act, the Corporate Income Tax Act and certain other acts, i.e. the so-called Polish Order Tax Bill, was published on the parliamentary website. One of the solutions proposed in the draft is the introduction of a new form of taxation - a minimum CIT, or a tax on income.
The aim of the changes is to tighten up the tax system and generate tangible income for the budget from corporate income tax.
The draft tax bill of the Polish Order provides for the introduction of a new minimum corporate income tax, and the new form of taxation is to be implemented by linking the amount of tax paid by large companies, especially multinationals, with the actual place in which they generate their income.
A minimum CIT of 10% of the tax base will cover resident companies as well as tax capital groups which:
The minimum CIT will also be paid by non-residents operating through a foreign permanent establishment located in Poland, to the extent to which this permanent establishment generates income and incurs losses from its activities.
Certain categories of entities have been excluded from minimum CIT taxation, also under a supplementary self-amendment to the Act, and they include entities which, despite meeting certain conditions, are:
The taxable base will be the sum of the amounts specified in the provision, which will consist of:
The draft also specifies that the minimum income tax will be deductible in subsequent tax years from the classic CIT when filing the tax return for the consecutive 3 tax years immediately following the year in which the minimum income tax was paid.
The values that reduce the tax base will be:
It is worth noting that the new minimum corporate income tax will be calculated annually and paid into the account of the tax office. Taxpayers will also be required to show reductions to the tax base, as well as the amount of the minimum income tax.
The income tax, or minimum CIT for legal entities, is due to come into force effect from 1 January 2022.
Webinar: The Polish Order - changes concerning PIT