BI: There will be a new tax for companies. In less than two months
Companies in trouble, with low margins, may pay more income tax than companies in better financial shape. This is how the minimum tax, which will come into effect as of 1 January 2024, is to work. However, it will be possible to avoid it, but it is necessary to prepare for it now, writes Business Insider Polska.
How the new tax is supposed to work for Business Insider Polska is explained by Marek Kończak, legal advisor and senior manager at Thedy & Partners, using examples. The expert admits that despite many positive changes, the current regulation may lead to absurd situations.
Example 1
A taxpayer who has been building a property for three years shows a tax loss (showing income is only planned after the property is built and sold). Currently, he is also showing a loss, with only a small amount of income from the provision of advertising space.
In this situation, the taxpayer will have to pay a minimum tax. The tax base will be 1.5 per cent of income plus certain expenses (e.g. for surety services), or 3 per cent of income (without additional augmentations).
Example 2
A taxpayer has a wholesale business in which he has had minimal profitability (less than 2 per cent) for three years. Let us assume that, when analysing the accounts in December 2024, he finds that the recognition of a recently received invoice as a deductible cost will result in his profitability not exceeding the 2 per cent threshold for that year as well. Consequently, he may decide not to recognise this invoice as a tax cost and declare income exceeding the 2 per cent threshold of revenue in his annual CIT return.
– In the situation in question – at least theoretically and taking into account the literal content of the regulations – the taxpayer will not be obliged to pay the minimum tax, comments Marek Kończak. This means, he adds, that in this and other similar situations, taxpayers may be encouraged to conceal a certain excess of tax-deductible expenses (which, however, at least theoretically, may expose them to tax and penal-fiscal liability).
– The minimum tax is highly impractical and significantly complicates an already complicated tax system. The very broad list of exclusions and the particular way in which profitability is calculated will probably result in the tax being due only from a very narrow group of entities. Taking into account the fact that there are already a number of other provisions aimed at preventing the loss of budget revenues (such as the tax on pass-through income or the future minimum tax on global corporations), the provisions on the minimum tax in its current form seem to be unnecessary, assesses Marek Kończak.
The entire article can be read at this link: Podatek minimalny wchodzi w życie. Zobacz, jakie będą z nim problemy (businessinsider.com.pl)