On 1 January 2024, the suspension of the minimum tax regulations will end. Pursuant to Art. 38ec of the CIT Act entities whose tax year coincides with the calendar year are exempt from the obligation to pay the minimum tax for the period from 1 January 2022 to 31 December 2023. However, in the case of entities whose tax year does not coincide with the calendar year, the minimum tax exemption is valid until the end of 2023.
For the first time, the obligation to pay the minimum CIT tax will occur at the beginning of 2025.
Minimum tax is a levy applicable to companies and tax capital groups that meet the criteria specified in the regulations. It was introduced in 2022 as part of the so-called Polish Order. However, the legislator suspended the application of the minimum tax provisions until the end of 2023.
The minimum tax applies to entities specified in the regulations. However, certain groups of taxpayers are excluded from the new obligation. Namely, the following will be exempt from the obligation to pay the minimum CIT tax:
In 2024, the minimum CIT will cover some business entities operating on the Polish market. It is therefore important to know today how much tax you will have to pay.
It should be remembered that it is necessary to determine the tax base only if the profitability for the purposes of the minimum CIT does not exceed 2%. Only after determining the tax result within the meaning of the provisions on minimum corporate income tax and the company's profitability, it becomes necessary to calculate the tax base and the tax amount. The taxpayer will calculate the minimum tax amount by multiplying the tax base amount by 10%.
The tax base is the sum of the following three components:
Taxpayers can also choose a simplified method of determining the tax base. According to the simplified method, the taxable amount is the amount corresponding to 3% of the value of income from other sources - capital gains achieved by the taxpayer in the tax year. The taxpayer should inform the tax office about the choice of the simplified method in the tax return submitted for the tax year for which he made such a choice.
The taxpayer may deduct the amount of the minimum tax paid for a given tax year from the income tax in subsequent years. The taxpayer is entitled to a deduction in the annual tax return only for the next 3 tax years immediately following the year for which the taxpayer paid the minimum income tax.
When calculating the hypothetical amount of the minimum CIT tax, it should be taken into account that the situation of each taxpayer is different.
We recommend using our professional tax advisory services. We will verify whether you are subject to the minimum corporate income tax regulations. We will help you determine the tax base and determine the amount of minimum tax to be paid.
We will provide support in selecting optimal tax solutions and help in fulfilling administrative and reporting obligations arising from applicable regulations.
Learn about our service: Tax advisory in Poland