Positive changes to the Corporate Income Tax rules in Poland

Polish government has just adopted the amendments to the Polish CIT act. The main aim of the changes is to improve the Corporate Income Tax (CIT) rules and elimination of ambiguity in interpretation. Additionally, the amendments will reduce the administration obligations.

The most important changes of the draft amendment to the CIT Act include:

  • modification and suspension for 2022 and 2023 of the entry into force the rules regarding the minimum tax income,
  • repealing the regulations regarding the constructive dividends; however, the hidden profit regulations remain still in charge,
  • amendments in the obligations concerning the documentation in the scope of indirect transactions with tax havens,
  • modification of the laws regarding a Polish holding companies,
  • flexibility of the construction for the statement excluding the obligation to use the pay and refund mechanism,
  • changes in the regulations on taxation with tax on shifted income,
  • simplification of the regulations concerning settlement of debt financing in a tax costs,
  • repealing the reporting obligation to submit an attachment in case of using the bad debt relief,
  • improvement of the regulations on lump sum taxation on company income (Estonian CIT),
  • amendment to the regulation on the deadline for paying contributions for income from employment and equivalent income, in part financed by the payer, contributions to the Labor Fund, the Solidarity Fund and the Guaranteed Employee  Benefits Fund.

Additionally, there are also planned changes in other taxes due to necessity of prolongation anti- inflation solutions and maintaining the reduced VAT rates. These amendments are needed due to growing inflation within the previous months as well as the negative consequences of the war in Ukraine  for the Polish economy.

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