By Dr Robert Lewandowski, attorney at law (radca prawny) at Derra, Meyer & Partners in Warsaw
Since the beginning of this year, a lower corporate income tax (CIT) has been implemented in Poland amounting now to 15%. Currently there are two rates of CIT: 19% and the new one - 15%. The aim of the new law is designed to support rather small and medium sized enterprises and further stimulate the Polish economy. However, the conditions under which the lower corporate tax apply have been defined very precisely and rather narrowly. The reduced rate of 15% is relevant for two groups of taxpayers: (i) the so-called small taxpayers and (ii) “other taxpayers” only in the first tax year in which they have commenced with their business activities. The term of a “small taxpayer” refers to a taxpayer by whom the value of revenues generated from sales (along with the amount of value added tax due) did not exceed the amount of €1.2 million or its equivalent in Polish currency (PLN) in the previous tax year and this amount will be calculated in accordance with the exchange rate of the Polish National Bank. It is important to know that a taxpayer will still remain a small taxpayer even if its revenues in the previous tax year did not exceed the limit of €1.2 million and regardless of whether this taxpayer achieves a much higher income in the current financial year or not. However and in the event of the taxpayer generating in the present tax year revenue exceeding €1.2 million, it will lose the right to claim entitlement to the rate of 15 % next year. In addition, the lower CIP rate applies to “other taxpayers” only during the first tax year of commencing with their business activities and is therefore only available for a limited time. Naturally, the “other taxpayer” may later become a “small taxpayer” if it will meet already discussed requirements applicable to it (revenues below €1.2 million). The new tax regulation encompasses legal persons only (for instance entities such as companies and partnerships) and it will not apply to individuals providing business activities as proprietors and not to any other individuals not being entrepreneurs. However, legal persons may take advantages of the lower CIP tax independent of the nature of their business activity except for capital groups in the meaning of Article 19.1b of the Polish Corporate Income Tax Act which have been excluded from this tax benefit.
0+
