The drafted act is to constitute another step towards reconstruction of tax income of the state and in particular income from CIT, at the same time covering a wide spectrum of criteria with its scope. The act will impact a large number of entrepreneurs. The implemented provisions will significantly hamper conducting of activity mainly by large entities, and even though the legislator will not increase the CIT rate, it will increase the taxation base thanks to the tightening and the proposed changes.
Capital income and its separation from other income of the taxpayer
- separation of capital income from other income of the taxpayer,
- the loss from one source does not decrease income from the second source.
- Such provisions will be applicable also:
- In case of income (losses) obtained from activity conducted by companies being members of tax capital groups as well as
- in relation to taxpayers obtaining income and incurring costs as a result of share held in a company not being a legal person, joint venture, joint possession or joint use of objects and property rights.
Limitation of the possibility to classify expenditures on debt financing and intangible services to tax-deductible costs
- Expanding the catalogue of the potential costs of debt financing covered by the new limits even with such aspects as interest on leasing instalments.
- Possibility to classify the interest on financing to the tax costs in its full amount only in case when the surplus of the costs of debt financing does not exceed the amount of PLN 120,00.00 in the given year in the company of the given taxpayer.
- Otherwise, the surplus of the costs of debt financing may be classified to tax costs to the maximum amount of 30% of the value of EBITDA of the taxpayer.
- Additionally, it will be possible to classify expenditures resulting from intangible services (e.g. advisory, accounting, advertising services) as well as any fees and due amounts for the use or right to use the rights or intangible assets (e.g. licenses) to tax-deductible costs up to the maximum amount of 5% of EBITDA.
CFC – Principles for qualification of an entity as a Controlled Foreign Corporation
- Changes on the level of the tax rate as a criterion for assessment of the Controlled Foreign Corporations - from the nominal rate to the effective rate.
- In the field of determination what principles qualify an entity as CFC, we may distinguish 3 criteria:
- Holding (directly or indirectly) by the taxpayer, independently or together with affiliated entities, over 50% of voting rights, and over 50% share in capital or right to over 50% of profit of the subsidiary.
- Low taxation level criterion.
- The company, in which at least 50% of income is constituted by the so-called passive income (and after the changes, 33%) is considered as CFC.
- Obligation to keep to keep a Controlled Foreign Corporation Register (CFC Register)
- New catalogue determining classification to CFC.
Tax Capital Group – Modification of provisions
Bill - What is the minimum income tax in relation to taxpayers having commercial real estates?
The tax will cover the taxpayers having the real estates from the catalogue specified in the bill of strictly determined initial value exceeding PLN 10 million.
The value of the monthly tax will be calculated on the basis of the following formula:
Dividend profits - change of the scope of the exemption from the withholding tax
- limitation of the scope of the exemption from the withholding tax paid by the taxpayers on account of dividend and other income on account of participation in profits of legal persons.
- solely payments on account of dividend, other shared profits and increase of share capital, shall be exempted from the withholding tax
Changes in the principles of taxation of a division of companies
- the income of the shareholder of the divided company will be constituted by the defined issuance value of the shares of the taking-over or newly-established company, obtained by it.
Extension of the real estate clause
- The changes presented in the bill relate to events other than sale of shares/stocks, the subject of which are shares or stocks of the so-called real estate company, i.e. the company, at least 50% of shares of which are constituted, directly or indirectly, by real estates located in Poland or rights to such real estates.
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