The Ministry of Finance (MF) has prepared a practical guide that facilitates the settlement of the lump sum on company income. It is a new optional tax model for CIT taxpayers, which is modelled on the model in force in Estonia. Tax payers who apply tax explanations may benefit from their protective power.
Estonian CIT is an option allowing companies to replace existing CIT accounting rules with profit distribution tax. Instead of paying the tax every month, quarterly or every year on the income generated during that period, the Estonian taxpayer pays it only on the amount which it decides to transfer outside the business itself, e.g.
in the form of dividends. That's how an entrepreneur has 100% control of the amount and date of taxation. This is also the maximum simplified method of tax settlement, which removes the obligations associated with tax accounting from companies," stressed Deputy Finance Minister Jan Sarnowski.
Benefits of Estonian CIT
The use of the so-called Estonian CIT is possible from 1 January 2021 With the solutions contained in the tax package Polish Deal This tax model will be an even more attractive and more accessible tax option.
It will be abolished, among others, in force in 2021 income limit (100,000,000 PLN Each year) and the obligation to invest for certain purposes at a certain level.
In addition to public limited liability companies and limited liability companies, the lump sum will also be available for limited liability companies, limited liability companies and simple public limited liability companies.
What can be found in the explanations
The tax explanations highlight key issues related to the operation of the lump sum on company income, including:
- entities entitled to Estonian CIT,
- the conditions for using Estonian CIT,
- the entry procedure in Estonian CIT,
- the principles and subject matter of taxation in the Estonian CIT regime,
- the consequences of the infringement of the conditions entitling to benefit from the Estonian CIT,
- the ‘exit’ procedure of the Estonian CIT.
Explanations include more than 50 practical examples that address the main issues related to this form of taxation.
We want Estonian CIT to be friendly and fully understandable to taxpayers. We are taking a number of steps to achieve this objective. one of them is a practical guide to the lump sum of company income," added Deputy Minister of Finance Jan Sarnowski.
We want Estonian CIT to be a response to the real needs and expectations of entrepreneurs, which is why in recent times we have studied your concerns. Thank you for all the comments made in the consultation. These were valuable tips for us when we worked on the final version of the explanations.
Go to tax explanations.