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Tax changes. A revolution is brewing for large companies

The Ministry of Finance is preparing another change in taxes. This time he started to tighten the PIT and CIT systems. In the list of legislative and program works of the Council of Ministers, an appropriate bill appeared, which would be adopted in the third quarter of this year.

– It is surprising that the design came out like a hat. The introduction of the Estonian CIT or other taxes was loudly announced, and the government is introducing revolutionary changes for companies quietly – comments Grzegorz Szysz, partner and tax advisor, Grant Thornton in an interview with money.pl.

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It is about 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 some other acts.

As the legislator explains, the aim is to tighten the income tax system, through, inter alia, extending the CIT Act to companies with their registered office or management board in Poland.

“The goal is (…) to respond to the optimization structures created by taxpayers with the use of limited partnerships by granting the limited partnership the status of an income tax payer” – reads the document.

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These are limited partnerships and general partnerships “in the case of which the taxpayers of income tax participating in the profits of such general partnerships are not disclosed, which makes it possible for these entities to avoid taxation with income tax” – explains the legislator.

Grzegorz Szysz points out that these changes will affect, for example, developers using limited partnerships, but above all family businesses.

– This change will affect about 40 thousand entities. Mainly family businesses that have departed from individual business activities and operate through limited partnerships – emphasizes Grzegorz Szysz.

How she respects the changes means a big excitement. – Nobody knows on what terms it will be introduced. We can expect a big uproar among companies, as happened seven years ago, when changes were also planned for limited partnerships. Companies do not know whether they should wait for specific solutions or introduce changes, and in what directions – he emphasizes.

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As the expert admits, the project also includes favorable solutions, for example those that allow the use of a favorable 9 percent. CIT rates for a larger group of entities.

– The scale of the favorable, however, is disproportionate to those unfavorable for companies using limited partnerships – he emphasizes. – It is hard to resist the impression that the changes are aimed at increasing budget sources.

Let us recall that according to the document, the limit of revenues from the current tax year entitling to use the reduced 9% is changing. CIT rates. Under the new regulations, it would be increased from the current EUR 1.2 million to EUR 2 million. Abolition relief will also be abolished.

The government also envisages introducing solutions to facilitate the recovery of tax on income from the sale of shares (stocks) in real estate companies by non-residents – it follows from the draft act.

The authors of the draft explain that the changes in taxes are to adapt the law to the specifics of the Polish economy and the specificity and size of companies operating in Poland. In particular, it concerns the principles of the tax policy pursued by these companies.

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