What’s going to change?
As of 1 January 2022 new so called “tax on revenues” or “minimum tax” will enter into force. The new tax will be levied on companies being CIT taxpayers and Tax Capital Groups:
- incurring a tax loss, or
- whose tax income/revenue ratio is below 1%.
For the purpose of loss / ratio calculation, costs of development or acquisition of fixed assets, including depreciation write-offs, are not taken into account.
Though certain exclusions are provided (see below), there is no limitation of application of the new tax to companies above a certain revenue threshold.
The new tax rate is 10%, whereas the tax base is calculated as:
- 4% of the company’s revenue (other than capital gains), plus
- the sum of passive “excessive” expenses (in general, intra-group: financing, intangible services and royalty costs, as well as certain deferred tax assets positions).
Exclusions can apply, i.a. to financial institutions (specific CIT definition), companies benefiting from Special Economic Zones / Polish Investment Zone (but the scope of the exclusion is unclear), new businesses (for the first three years), companies suffering 30% revenue drop in the preceding year, companies with a simple ownership structure (with “group” income / revenue ratio >1%) , and companies paying the so-called Estonian CIT.
The “tax on revenues” can be deducted from “standard” CIT for a maximum of 3 years and is due on a yearly basis.
What does it mean?
- 40 000 PLN (c.a. EUR 8,5 k) additional tax burden on every PLN 10 m of non-capital gains revenues (c.a. EUR 2,1 m)
- 10 000 PLN (c.a. EUR 2,1 k) additional tax burden on every:
- PLN 1 m (c.a. EUR 217 k) of IC financing costs > 30% tax EBITDA
- PLN 1 m (c.a. EUR 217 k) of IC intangible services costs > (5% tax EBITDA + 3 m PLN (c.a. EUR 750k))
- PLN 1 m (c.a. EUR 217 k) of IC royalties costs > (5% tax EBITDA + 3 m PLN (c.a. EUR 750k))
- PLN 1 m (c.a. EUR 217 k) of selected deferred tax asset positions
safe for deduction from “standard” CIT .
