Minimum Corporate Income Tax
Starting January 1, 2024, the provisions for the minimum corporate income tax will be reinstated.
The 10% minimum tax will be applicable to companies with Polish tax residency and domestic tax capital groups under specific conditions within the tax year:
- Incurring a loss from a source of income other than capital gains, or
- Achieving less than 2% of profit concerning non-capital gains income from a source other than capital gains to the respective profit.
Special rules are outlined in tax regulations for determining the loss concerning minimum tax, implying that an accounting loss doesn’t automatically result in minimum taxation.
It’s crucial to note that tax simulations conducted a few years back might not align with the rules changed from January 1, 2023. With this amendment, the calculation methods for loss and profitability levels have been revised, and the range of entities exempted from minimum taxation has expanded.
For taxpayers operating with a tax year different from the calendar year, the minimum tax provisions will come into effect from the tax year starting after December 31, 2023.
The tax base, in essence, amounts to 1.5% of income from operational activities, considering exclusions and deductions, with a critical emphasis on accurately identifying related parties and their transactions.
Which Entities are Affected?
The minimum tax may impact companies in sectors facing low profitability or temporary losses, such as:
- Real estate
- Wholesale and retail trade
Whether a loss or profit below 2% adheres to the arm’s length principle is inconsequential.
Tax Lawyer in Warsaw
If you’re seeking a tax lawyer in Warsaw, our law firm is well-equipped to assist. Poland’s tax landscape is constantly evolving, especially concerning both local and cross-border regulations, posing significant challenges for businesses and individuals alike. Lately, tax authorities have ramped up investigations, increasing their complexity and frequency, signaling a continued enforcement trend.
Navigating this requires a multi-faceted approach and precise tax adjustments to optimize effectiveness. At Bernard Łukomski’s firm, we possess comprehensive expertise in national and international tax laws. We offer counsel on personal and corporate income taxes, VAT, excise duty, transfer tax, stamp duty, real estate tax, tax disputes, social security, and fiscal criminal law.
Our services extend to managing tax control and litigation cases, encompassing challenges to tax liability decisions and interactions with tax authorities, administrative courts, and the Supreme Administrative Court. Getting sound tax advice not only minimizes transaction costs but also averts severe penalties and repercussions.
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