Crutial amendments to the Polish tax legislation in 2019

The CIT (Corporate Income Tax) in Poland is a tax collected from legal entities and the PIT (Personal Income Tax) is collected from physical persons. The amount of CIT is based on the net income companies obtain exercising their business activity, and the PIT must be paid by every individual who obtains income, e.g. receives remuneration (under employment contracts or civil law agreements) often on a monthly basis. As you may understand inflows from the CIT and PIT are serious "money spinner" for the government of Poland.

The Ministry of Finance of Poland is currently undertaking Corporate Income Tax reform by means of introducing recent "2019 Tax Bill" (the Bill). The above-mentioned changes have quite comprehensive nature but today, we would like to pay more attention to the reformation related to CIT and Virtual currencies.

There is a substantial review of Corporate income Tax Under the Bill. Therefore, tax-payer whose income for the tax year does not surpass EUR 1.2 million will receive tax reduction to nine percent (9%) instead of classic nineteen percent (19%). It is also worth to note that potential tax payer that wish to decrease their tax rate should have the status of a small taxpayers and their share of income in revenues shall not exceed thirty-three percent (33%). According to the governments clarification, the reduced rate of the tax will not be applicable to income gained from capital gains.

The Bill also presents detailed rules of taxation of the income gained from virtual currencies. Incomes from trading in digital currencies will be regulated as incomes from capital in PIT or capital gains in CIT. The loss incurred while trading in virtual currencies will not be deducted from other taxpayer's income, for example from the sale of shares or from business activity.

The Bill also puts forward a lot of other new changes to the current tax system (e.g. recognition of costs of receivables gained with an objective of collection; creation of exemption from Withholding Tax with related to interest coupons payable on Eurobonds, adjustment of rules of recognition of costs upon debt-to-equity swap etc.).

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