The draft Senate Act passed by the Sejm introduced amendments that eliminated any provision concerning the corporate income tax charge (CIT) of limited companies. On 28 November 2020 However, the Sejm rejected the amendments introduced by the Senate, thus restoring the original wording of the draft to then submit them to the President for signature. The president's signature appeared on Sundays 29 November, and the publication of the Act in the Official Journal of the Laws came 30 November.
From published in the Journal of Laws Act dated 28 November 2020 on the amendment of the Personal Income Tax Act, the Corporate Income Tax Act, the Flat-rate Income Tax Act on certain revenues generated by individuals and certain other laws, we find that all limited companies will be subject to CIT and will not be affected by ownership structure, size of their business and foreign capital. At this point it is worth mentioning that the Act provides that certain limited companies may benefit from a reduced rate of CIT 9%, where, in accordance with the wording of the amended provision, a limited company whose income does not exceed 2,000,000 EUR in the tax year, it will be able to benefit from a reduced rate of CIT.
Transitional provisions indicate that the distribution of profits of the company obtained before 2021 will be taxed on a pre-recast basis
Taxing CIT will also not circumvent public companies established or managed in the territory of the Republic of Poland if the shareholders of the public company are not exclusively natural persons and the public company does not submit:
(a) prior to the beginning of the financial year, information on corporate tax taxable persons and individuals tax taxable persons having, directly or through non-taxable persons, the right to participate in the profit of the company concerned, under Article 5(1) the above Act or referred to under Article 8(1) Act dated 26 July 1991 on personal income tax (Journal of Laws of 2020, item 1426, as amended[2]), or
(b) update the information referred to in point (a), time 14 days from the date of the changes in the membership of taxpayers
It should be recalled that the law also provides for the possibility of delay in the CIT coverage of a limited partnership. It turns out that a limited company may decide that the laws will apply to that company only from the date 1 May 2021
Finally, it is worth noting that transitional provisions indicate that the distribution of profits of the company obtained before 2021 will be taxed on a pre-renovation basis.
Although it was assumed that CIT tax legislation would not be possible to introduce In 2021, so that the whole procedure is in line with the tax-constitutional calendar it turned out that all deadlines had been retained and the bill would enter into force on 1 January 2021. Therefore, as of next year, the limited company will be subject to CIT and the public company, which consists of entities other than natural persons, will have to submit appropriate information to avoid paying that tax.
Author: Paweł Boś
Junior Tax Consultant, related to Russell Bedford Poland 2018. Author of numerous articles on legal and tax matters, published in the industry press. Law student at Leon Kozminski Academy in Warsaw