MF: Polish Deal to be amended

The changes to the Polish Deal were announced yesterday by Finance Minister Tadeusz Kościński. What will change?

– Those who pay PIT according to the scale from next year will pay a 9% contribution without the possibility to deduct it from their tax. On the other hand, taxpayers settling their PIT using a flat rate or a lump-sum tax will pay a contribution of 4.9%, instead of the originally envisaged 9%, according to Adam Allen, tax advisor and partner at Thedy & Partners.

The announcement of the Ministry of Finance also shows that the minimum contribution will amount to 9% of the minimum salary, i.e. ca. 270 PLN. For flat-rate entrepreneurs with annual revenues of up to PLN 60 thousand, the health contribution will be 9% of the minimum wage, i.e. approx. The health contribution will be 9% of 60% of the average remuneration. For revenues between PLN 60 and 300 thousand, it will be calculated on the basis of 100% of the average salary, and for higher revenues – on the basis of 180% of the average salary.

Also companies on the card are facing changes. The first draft assumed that the basis for calculating the 9% premium was to be the average salary. Now, however, it is to be the minimum wage.

– If we assume that from next year the average remuneration is to amount to PLN 5922, it means that for revenues up to PLN 60 thousand per year, the monthly contribution will amount to nearly PLN 320. On the other hand, for incomes up to PLN 300 thousand per year, the monthly contribution will amount to over PLN 530. In the case of income above PLN 300 thousand per year, the monthly contribution will amount to almost PLN 960. For card taxpayers, the contribution would amount to PLN 270 per month,” calculates Adam Allen.

– A novelty is to be the tax on income for the largest companies. It is to be set at 0.4% of company revenues and 10% of passive expenses. The new tax is to cover capital companies and tax capital groups that show losses or whose income is below 1% of income from operating activity, excluding the purchase of fixed assets,” points out Łukasz Kupryjańczyk, tax advisor and partner at Thedy & Partners.

The expert adds that the original ideas on Estonian CIT and tax residency will also change. According to the information presented by the Minister of Finance, the effective CIT and PIT will be reduced not only for small companies from 25 to 20%, but also for others from 30 to 25%.

As far as the tax residency of management board members is concerned, it has been specified that taxation with Polish CIT of a foreign company will be possible if management board members actually manage the foreign company from Polish territory – however, regardless of their tax residency.

The changes under the Polish Deal are to come into force on 1 January 2022.