From 1 January 2020 the quota limit will be increased, which is the upper limit of the volume of revenue to which taxpayers can benefit from the status of "small taxpayer".
In force until the end of the year 2019 a small taxable person shall be considered to be an entity whose sales income did not exceed in the preceding tax year the amount of gold corresponding to the equivalent 1,200,000 EUR – according to Article 4a(10) Corporate Income Tax Laws (hereinafter: updop) and Article 5a(20) Personal Income Tax Act. Overshooting the indicated limit results in the loss of the ability to account as a small taxpayer and thus the use of the tax preferences provided for in the Act.
The sales value limit will be increased to an amount 2,000,000 EUR. Thus, a larger group of taxpayers will be among the beneficiaries of the status, as the limit will be increased by more than 3,600,000 PLN
In order to establish the status of a small taxpayer, account should be taken only of sales revenue. In the light of the above, account should not be taken, inter alia, of dividends and interest in the profits of other legal persons. Conversion of the amounts expressed in euro is made on the basis of the average euro rate announced by the National Bank of Poland to first the working day of October of the preceding tax year, rounded to 1,000 PLN.
It should be stressed that a small taxpayer can be repeatedly, and the use of the facilities provided for this group of payers depends on the revenue achieved in the year immediately preceding the year in which the entity becomes a small taxpayer.
Legal status as of one year 2020
According to the Act dated 9 November 2018 amending certain laws in order to introduce simplifications for traders in tax and economic law, amending the existing legislation on the adoption, the sales value limit will be increased to an amount 2,000,000 EUR. Thus, a larger group of taxpayers will be among the beneficiaries of the status, as the limit will be increased by more than 3,600,000 PLN.
Conversion of the limit will be made in the same way up to a year 2019, and in addition, the reference point to the limit will remain the same, so it will be sales for the previous tax year. This means that the status of a small PIT taxpayer in 2020 the application to the value of sales income in the tax year will be determined 2019.
Tax preferences arising from obtaining the status of a small taxpayer
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the possibility of quarterly income tax settlement;
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the right to a one-off calculation of the total value of fixed assets purchased (this applies only to selected fixed assets excluding passenger cars) in the cost of obtaining income during the month of their introduction to depreciation up to an amount not exceeding the equivalent in the tax year 50,000 EUR;
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the possibility to benefit from the highest benefits of R & D activities;
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one the conditions for application 9-percentage of CIT rates.
Indicated above 9% the CIT rate is a relatively new tax preference for having the status of a small taxpayer, since its application has been possible since January 2019 So a reduced rate 9% CIT can only be taxed on revenue obtained from 1 January 2019, excluding revenue from capital gains.
It should be stressed that the reduced rate of CIT will benefit both small taxpayers and and taxpayers starting business in a given year.
Circumstances excluding use 9% tax rates
In addition, it should be noted that the Article 19(1a) situations limiting the application of the preferential tax rate. Such a restriction shall apply to taxable persons arising from restructuring activities, inter alia, resulting from the transformation, merger or division of taxable persons, with the exception of the transformation of the company into another company, or formed by legal persons, natural persons or entities not having legal personality which have contributed to the capital of the taxpayer previously run by them, an organised part of the undertaking or the assets of that undertaking with a value which together exceeds the equivalent in the amount of gold at least 10,000 EUR.
In the above situations, the taxpayer cannot benefit from a lower rate of tax in the tax year in which he started his business and in the tax year immediately after that. 9% CIT will therefore be eligible from third the tax year, and in addition to the condition of a small taxpayer.
Moreover, the regulation preventing the application of a reduced rate of CIT contains Article 19(1c), in which it was indicated that in the tax year and in the tax year immediately following that in which the company was divided or a contribution was made to another entity, including capital in the form of:
- - an undertaking previously run by it, an organised part of the undertaking or an asset of that undertaking with a value exceeding the total equivalent in the gold amount 10,000 EUR or
- - the asset acquired by that taxpayer as a result of the liquidation of other taxable persons, if that taxpayer held shares in those other liquidated taxable persons;
- taxpayers are not allowed to benefit from a preferential CIT.
Author: Anna Jeziorska, tax consultant, Russell Bedford Poland, office in Katowice