Minimum tax to be suspended
The Finance Ministry will publish a draft amendment to the Corporate Income Tax Act in Q3 2022. The changes will be substantial and will cover several important areas, including, among others, the minimum tax, regulations on WHT, debt financing or hidden dividend. In the coming days we will inform what the MF is planning, although as long as there is no draft it is difficult to analyse the details of these novelties.
However, let us start with the planned changes to the minimum tax. The MF announces that it wants to postpone the entry into force of the provisions on minimum income tax. The idea is to suspend the application (exemption) of the provisions of Article 24ca of the CIT Act for a period of 1 year, i.e. from 1 January 2022 to 31 December 2022. The postponement of these regulations, as we read on the MF’s website, is to protect Polish companies from possible negative consequences of the tax coming into force in circumstances when political and economic turbulences affect the global economy and, consequently, the entities operating within its space.
– The tax itself, or more precisely its structure, is also to be modified. The MF wants to increase the profitability rate to 2% and at the same time change the methodology of its calculation (i.a. exclusion of payments under fixed asset leasing agreements from tax deductible costs, exclusion of the value of trade receivables sold to entities from the factoring industry from revenues, exclusion of excise duty value). Additionally, an alternative method of determining the tax base is to be introduced – at the taxpayer’s choice (tax base is to be 4% of revenues (tax rate – 10%) or tax base is to be 2% of revenues + passive costs, i.e. debt financing and intangible services + disclosure of WNIP (tax rate – 10%). Moreover, the catalogue of exclusions from this tax is to be extended (municipal companies, small taxpayers, taxpayers with the majority of revenues generated in connection with the provision of health care services, taxpayers, whose profitability in 1 of the last 3 tax years was above the index of 2%, as well as taxpayers put into bankruptcy or liquidation) – indicates Lukasz Kupryjańczyk, tax advisor, partner in Thedy & Partners.