Tax advances are to be computed and remitted by the taxpayer monthly or quarterly in the initial year, or if gross sales in the prior year did not surpass EUR 2,000,000. The basis for calculation comprises current taxable revenues and tax-deductible costs. The taxpayer can opt to estimate the tax based on the tax year preceding the previous year (current year – 2).Deductions
Typically, expenses related to procuring, ensuring, and maintaining taxable income are fully deductible, unless categorized as non-deductible items. Certain items are deductible up to limits stipulated by law.Carry Forward of Losses
Tax losses can be carried forward for up to 5 tax years. During each year, the company cannot utilize more than 50% of the loss. Loss from a specific source (business activity/capital gains) must be utilized within that same source. It is also possible to reduce the loss by an amount not exceeding PLN 5,000,000 at a time, with the remaining amount deducted in the subsequent years of the five-year period. However, the annual reduction may not exceed 50% of the loss amount.Dividend Payments
Dividends distributed from profits are subject to a 19% tax rate. Nevertheless, exemptions under the EU Parent-Subsidiary Directive are applicable.Minimum Tax
The minimum tax is imposed on companies, tax capital groups, and foreign entrepreneurs' permanent establishments that, in a tax year:
- Incur a loss from a source of income other than capital gains, or
- Have a share of income from a source other than capital gains not less than 2%.
The tax rate for this is 10%, and the tax base comprises:
- 5% of the value of the company’s income other than from capital gains (currently 4%)
- Costs of debt financing exceeding 30% of the so-called EBITDA
- Costs of intangible services and royalties
An alternative method applies a 3% rate (formerly 4%). In this approach, the tax base is the sum of income from the source other than capital gains earned by the taxpayer in the tax year.
A significant aspect concerning the minimum CIT is the suspension of the regulations in this regard in 2023. Taxpayers will make the first payment for this tax in 2024.