Further important changes in income taxes and the Polish Tax Code

The main changes aiming at simplifying the regulations and introducing new tax incentives

• 5% preferential  PIT and CIT rate on incomes / gains from intellectual property rights resulting from R&D works (Innovation Box);
• 9% preferential CIT rate for taxpayers with revenues not exceeding EUR 1.2m. in the tax year;
• deemed deduction of hypothetical interest (notional deduction – maximum of PLN 250ths in the tax year) on equity used for re-investment purposes;
• new regulations relating to the purchase of debt portfolio, in particular allowing to recognize the full cost base of acquisition of receivables provided that there is no possibility to recognize losses for tax purposes;
• withholding tax exemption for interest and discount obtained by non-residents from Eurobonds;
• new regulations concerning virtual currencies trading.

The main changes in anti-avoidance measures

• introduction of so-called exit tax, i.e. the tax on transfer of assets abroad or change of tax residency of the taxpayer;
• introduction of so-called mandatory disclosure rules i.e. the obligation to notify information on tax schemes to the tax authorities;
• further anti-avoidance changes both with respect to General Anti-Avoidance Rule as wells as specific anti-avoidance clauses included in income tax regulations;
• introduction of additional tax liability in case of tax assessment resulting from anti-avoidance rules;
• completely new mechanism of settlement of withholding tax in relation to payments exceeding PLN 2 m. per annum for each taxpayer – generally, the remitter will be obliged to collect withholding tax at the domestic rate. The taxpayer or remitter that incurred the economic cost of tax will be entitled to apply for refund of tax to the tax authorities;
• further changes in CFC regulations

What does it mean for me?

The amount and importance of proposed changes will have a significant impact on tax settlements.