A number of important tax changes have been introduced as of 1 January 2017. Below we would like to present changes in the CIT Act
1. A decrease of the CIT rate from 19% to 15% for small taxpayers, i.e. taxpayers whose sales revenue (including VAT) generated during the previous fiscal year or during the first fiscal year in case of taxpayers starting their economic activity did not exceed the amount equal to EUR 1.2 million. The lawmaker’s objective is to increase economic development and support taxpayers during the initial phase of their economic activity.
2. Change in taxation rules for share premium contributions According to it, taxpayer’s revenue – in case of an in-kind contribution in a form other than an enterprise (or an organized part thereof) – is the value of the subject of the contribution as defined in the statute, articles of association or a different document, instead of the par value of shares issued in return for the contribution, which had been the binding value until the end of 2016. In case the value of the subject of the contribution significantly deviated from its market value, the revenue will be determined according to the contribution’s market value.
3. Introduction of the definition of beneficial owner. A taxpayer who wishes to be exempt from withholding tax will need to prove that the recipient of the due amount is its beneficial owner.
4. Application of preferential rules of taxation to the so-called exchange of shares will depend on the occurrence of justified economic reasons for it. Currently, there is a presumption that if a merger, division or an exchange of shares were not performed due to justified economic reasons, it is assumed that the main or one of the main objectives for such an action is tax evasion or avoidance.
5. The non-exhaustive catalogue of revenues generated by non-residents which are considered as generated on the territory of Poland, and thus are subject to taxation in Poland, has been extended. The catalogue includes, among others, revenue from securities admitted to public trading on the Polish market, direct or indirect sale of shares, rights in partnerships and participation units in investment funds, in case at least 50% of these assets’ value is derived from real estates located in Poland.
Source: Act amending the Personal Income Tax Act and the Corporate Income Tax Act dated 5 September 2016 (J.L. of 2016, item 1550)