Correction of the return will allow recovery of overpaid tax
A taxpayer who paid 19% CIT for 2021, but was entitled to benefit from the 9% rate of this tax, can recover the overpayment. All that is needed to do so is a correction of the return.
This position was confirmed in one of the latest tax interpretations by the Director of the KIS. In the case under review, the company’s revenues in 2021 and 2022 did not and will not exceed the statutory limit of EUR 2 million. However, for 2021, the company paid CIT at a rate of 19%. It is now wondering whether it could improve its accounting by applying the 9% rate.
– It turns out that this is possible. Let us remind that the provisions of the CIT Act indicate that the 9% tax rate may be applied in the case of taxpayers in which all revenues earned in the tax year did not exceed the amount expressed in PLN equivalent for 2021 – EUR 2,000,000, i.e. PLN 9,097,000, and for 2022 – EUR 2,000,000, i.e. PLN 9,178,000. Once this limit is exceeded, the right to a reduced tax rate is lost – explains Marek Kończak, Senior Manager at Thedy & Partners.
In order to determine whether a taxpayer has exceeded the aforementioned income limit of €2,000,000, all the taxpayer’s income in the tax year is taken into account, without excluding income from capital gains. Of course, the legislator has included a number of caveats to the possibility of benefiting from the reduced corporate income tax rate. These reservations are included in Article 19(1a-1e) of the CIT Act.
In the case under review, the company meets the definition of a small taxpayer and the said reservations from Article 19 do not apply to it. What can therefore be done in this situation?
– The company may correct the applied tax rate (file a correction of the income tax return for 2021 by changing the corporate income tax rate from 19% to 9%) and obtain a refund of the overpayment of corporate income tax for 2021 resulting from payment of tax at a rate of 19%, while the correct rate for the company in 2021 was 9% of the tax base. The right to file such a correction is given to the taxpayer by the provisions of the Tax Ordinance – hints Marek Kończak.
Individual interpretation of 7 October 2022, no. 0111-KDIB1-1.4010.477.2022.1.AW.