From January 1, 2024, a new type of corporate income tax will be introduced for organizations in Poland – the minimum income tax (minimalny podatek dochodowy od osób prawnych, CIT). This tax is intended to be applied to companies with losses, that is, low income and relatively high operating costs.

The minimum income tax applies to almost all CIT taxpayers: who have their place of business or management in Poland and are therefore subject to tax on all their income, regardless of where they are received, or to Polish non-residents operating through a foreign establishment located on the territory of the country.

Those who pay personal income tax, individual entrepreneurs and some companies whose partners are only payers of personal income tax are not taxpayers of the minimum corporate income tax.

The following are exempt from the minimum corporate income tax:

• CIT taxpayers starting their own business and those who have been running it for no more than 3 tax years (including the year of opening),
• CIT taxpayers whose income in a given tax year was at least 30% lower than in the previous year,
• financial companies (banks, insurance, investment),
• taxpayers who received income in connection with the operation of ships or aircraft in international transport or mining, the prices of which depend directly or indirectly on quotations on world markets,
• medical organizations,
• companies, if their shareholders and partners are individuals and the taxpayer does not directly or indirectly have more than 5% in the capital of another company,
• taxpayers who are part of a group of at least two companies, in which one company directly owns 75% of the shares in the authorized capital of other companies in the group,
• small taxpayers (gross sales income does not exceed 2 million euros),
• municipal organizations,
• and other categories.

The main condition for the minimum tax on corporate income will be the criteria of low income or tax loss.It will be paid by taxpayers who:

• suffered a loss (from a source of income other than capital gain), or
• received a return on revenue of no more than 2% (have a low share of profit in income other than capital gains).

The tax base for the minimum corporate income tax will be the sum of four groups of values:

1) an amount corresponding to 1.5% of operating income (from a source of income other than capital gains) received by the taxpayer in the tax year, and

2) debt financing costs incurred for related parties – in an amount exceeding 30% of the EBIT (Earnings Before Interest and Taxes) of the taxpayer, and

3) the value of deferred income taxes resulting from the disclosure in tax calculations of an intangible asset that has not yet been amortized to the extent that this results in an increase in gross profit or a decrease in gross loss, and

4) expenses in excess of PLN 3 million and 5% of EBIT.

Any reductions and tax deductions that reduce the tax base of the taxpayer in a given year are subtracted from the tax base calculated in this way.

The tax rate for the minimum corporate income tax is set at 10%.

An example of calculating the minimum corporate income tax:

Or

* from the cost group, exclude costs arising from the acquisition or improvement of fixed assets, as well as expenses for writing off depreciation on these fixed assets (only costs for fixed assets are excluded, and expenses for intangible assets are not deducted),

** calculation: share = result x 100/income.

Or

The taxpayer may choose the simplified method of determining the tax base, which is an amount corresponding to 3% of the value of income received in the tax year from sources of income other than capital gains.

Minimum corporate income tax paid can be deducted from the “classic” corporate income tax CIT in subsequent years, regardless of whether the tax is capital income or non-capital income of the organization. You can make a deduction in your annual tax return CIT-8 within 3 years after the year in which the minimum corporate income tax was paid.

It is expected that the minimum corporate income tax payment deadline will be by the 2024 tax return filing deadline.