Limited partnerships will be covered by CIT – it results from the amendment passed by the Sejm. According to the Ministry of Finance, the main goal of the changes is to tighten the tax system and prevent money from being siphoned off to tax havens. Now the regulations will go to the Senate.
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232 deputies voted in favor, 215 were against, and one abstained. The coverage of CIT for limited partnerships is to apply from May 2021. Change of validity period Minister of Finance Tadeusz Kościński announced. Most of the originally new solutions were to enter into force from the beginning of next year.
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Controversies
Opposition representatives accuse that the amendment will result in double taxation of limited partnerships and liquidation of enterprises. The changes are also criticized by organizations associating entrepreneurs. “The application of CIT to limited partnerships will lead to a significant increase in taxes for nearly 73,000 Polish entrepreneurs,” wrote the report prepared by CRIDO, the Association of Entrepreneurs and Employers and InfoCredit.
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Deputy Minister of Finance Jan Sarnowski stated that the basic goal of this amendment is to improve the condition of the small and medium-sized enterprise sector in a situation caused by the pandemic. – Companies need three things that this law will give them. First, low taxes that will allow companies to build financial airbags and invest when it’s beneficial to them. (…) Secondly, companies need security and maximum simplicity in settlements. Companies also need a level playing field, he said.
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The deputy minister emphasized that thanks to the package of tax changes voted on Wednesday, also thanks to it the Act on the Introduction of Estonian CIT, entrepreneurs will have PLN 7 billion left in their pockets next year, and 400,000 of the smallest companies will benefit from the changes.
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Sarnowski said that, according to the data of the National Revenue Administration, limited partnerships registered in Poland are becoming more and more often a vehicle for taking money to tax havens.
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– This does not apply only to the 3 percent of limited partnerships owned by foreign entities, but also to entities owned by Poles, which transfer funds abroad through transactions with entities registered in tax havens – he emphasized.
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Changes
It concerns a draft amendment to the act on personal income tax, the act on corporate income tax, the act on flat-rate income tax on certain revenues earned by natural persons and certain other acts.
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In addition to granting a limited partnership the status of a taxpayer of income tax and extending the scope of estimating the value of transactions, the draft also provides for, inter alia, that the limit of revenues from the current tax year entitling to use the reduced CIT rates will be raised from 1.2 to 2 million euros.
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In the act on the lump sum, the income limit will be raised – from 250,000 to up to EUR 2 million – conditioning the choice of a lump sum. Some lump sum rates are also to be reduced.
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On Wednesday, MPs adopted amendments to the amendment to the act, which include extending the validity of tax solutions introduced by the so-called anti-crisis shields. These include research and development allowances for the fight against COVID-19 or donations of entrepreneurs to entities, for example hospitals, that are involved in the fight against the epidemic.
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photo-source">Main photo source: Shutterstock
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