From January 1, 2019, an amendment introduces a reduced CIT rate of 9% for certain taxpayers. The new rate will replace the current 15% CIT rate. Two indicators determine eligibility for this preference: This measure applies to taxpayers with the status of a “small taxpayer” (determined based on revenues from the previous tax year), unless it is their first tax year. Currently, the status of a small taxpayer is based on the exchange rate as of October 1 of the year preceding the tax year.
Entities whose revenues in a given year do not exceed EUR 1.2 million expressed in PLN will also be eligible for the preference. The EUR 1.2 million threshold will be converted using the average euro exchange rate announced by the National Bank of Poland on the first business day of the tax year, rounded to the nearest 1,000 PLN. This means that entities seeking to apply the reduced rate will only be able to confirm their eligibility at the beginning of the year.
The preferential tax rate is limited solely to revenues (income) other than capital gains. It is important to note that the change in the rate applies only to tax paid by legal entities. Capital gains on the part of shareholders of such entities remain additionally taxed at a rate of 19%. Thus, from the perspective of the ultimate recipient of the profit, the income generated by the entity remains subject to double taxation, amounting to a total rate of 28% (or 38% for taxpayers not eligible for the new preference).
The 9% rate cannot be applied by: A divided company. A taxpayer who contributed to another entity, including towards capital: a) A previously operated enterprise, an organized part of the enterprise, or the assets of the enterprise exceeding in total the equivalent of EUR 10,000 in PLN, converted at the average euro exchange rate announced by the National Bank of Poland on the first business day of October of the year preceding the tax year in which the assets were contributed, rounded to the nearest 1,000 PLN, with the value of these assets calculated in accordance with the provisions of Article 14 of the Act, or b) Assets obtained by the taxpayer as a result of the liquidation of other taxpayers, if the taxpayer held shares (stock) in those liquidated taxpayers — in the tax year in which the division or contribution was made and in the following tax year.
Furthermore, the reduced rate cannot be applied by a taxpayer who began operations in the tax year and in the following tax year, if they were established: As a result of the transformation, merger, or division of taxpayers, except for the transformation of one company into another, or As a result of the transformation of an entrepreneur who is a natural person conducting business in their own name or a company that is not a legal entity, or By legal entities, individuals, or organizational units without legal personality that contributed their previously operated enterprise, an organized part of the enterprise, or the assets of that enterprise exceeding in total the equivalent of EUR 10,000 in PLN, converted at the average euro exchange rate announced by the National Bank of Poland on the first business day of October of the year preceding the tax year in which the assets were contributed, rounded to the nearest 1,000 PLN, with the value of these assets calculated in accordance with the provisions of Article 14, or By legal entities, individuals, or organizational units without legal personality contributing non-monetary assets towards the taxpayer’s capital, which were obtained by these entities or units as a result of the liquidation of other taxpayers, if those entities or units held shares (stock) in those other liquidated taxpayers.