The draft tax bill of the New Polish Order, sent for public consultation, includes, inter alia, simplification and clarification of the existing regulations on flat rate income and expansion of the catalogue of entities entitled to choose this system.
It should be noted that on 1 January 2021, regulations governing flat-rate income taxation came into force, and they were intended to increase the attractiveness of this form of taxation by, inter alia, linking taxable income to the categories of balance sheet law and modifying the basic principles of CIT taxation, as well as raising the limit of income earned from EUR 250 thousand to EUR 2 million.
This time, the proposed changes aim to allow a wider group of taxpayers, especially from the SME sector, to benefit from the flat rate on corporate income and thus to stimulate investment growth in the country. What specific changes regarding the flat rate await taxpayers, we explain in this publication.
As a result of the amendments, the flat-rate tax on income earned by a partner - shareholder of a limited liability company, shareholder of a joint-stock company and a limited joint-stock partnership, as well as a limited partner and a general partner of a limited partnership - from the payments of the company's distributed profits earned during the period of flat-rate taxation on the corporate income, is to be reduced by:
Moreover, for the payments of the distributed profits by a company being a taxpayer of flat rate on corporate income other than a small taxpayer or other than a taxpayer commencing business activity, which incurred a certain level of investment outlays in a given period and acquired the right to a 5% reduction of the flat rate on the payment of distributed profits the deduction of personal income tax is to amount to 51% of the amount corresponding to the percentage share of the shareholder in the company's profit, calculated as on the date on which the shareholder acquired the right to the distribution of distributed profit, multiplied by the due flat rate on the companies' income from the distributed profit of the company from which the income was generated.
Webinar: The Polish Order - changes concerning PIT