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The minimum tax appeared as one of the changes introduced by the Polish Deal from 2022, but its entry into force was postponed until 2024. The minimum tax is calculated at the moment of submitting the tax return for a given year (e.g. until March 31, 2025 for year 2024). If the minimum tax is higher than the regular CIT, then the resulting difference must be paid to the office as minimum tax.
Despite the fact that there is still more than a year for the payment of minimum tax in Poland we strongly advise to analyse right now whether:
In order to simplify the calculation of the minimum tax amount, we have prepared a tax calculator for you, available here.
Since the minimum tax may be a severe additional tax liability for taxpayers, it is worth taking a closer look at the exemptions. Minimum tax will not be paid by a taxpayer who falls into at least one of the following categories:
1) in the year of establishment and two subsequent tax years;
2) financial enterprise;
3) generated revenues in a given year that were at least 30% lower than in the previous year;
4) has a simple shareholder structure (only natural persons) and, as a rule, no shares in other entities (it is allowed to hold, directly or indirectly, up to 5% of shares in the capital of another company or all rights and obligations in a company that is not a legal person);
5) generates most of its revenues from operation in the international transport of ships or aircraft, from the extraction of minerals or from medical activities;
6) is part of a group whose total profitability exceeds 2%;
7) is a small taxpayer;
8) is a company conducting municipal activities;
9) exceeded the 2% profitability threshold in one of the 3 years preceding the year in which the minimum tax is due;
10) is declared bankrupt, liquidated or is subject to restructuring proceedings;
11) is a party to the cooperation agreement;
12) is a financial institution dealing in factoring;
13) is a mining company.
Some exemptions apply to taxpayers from specific industries, others are independent of the industry. (e.g. exemptions for small taxpayers and those whose profitability changes significantly over the years).
In our opinion, the least precise provision is that the group’s total profitability is at least 2%. The wording of the provision raises numerous calculation doubts and we expect that it will be the subject of taxpayers’ inquiries as part of individual interpretations.
To calculate profitability, divide income (from non-capital gains) by revenues (from non-capital gains). In order to calculate income, several adjustments need to be made as a rule on the cost side. Adjustments increase income and, consequently, profitability. The corrections concern, among others: depreciation, leasing fees, increase in energy costs, excise tax, part of remuneration.
The legislator left taxpayers to choose the method of calculating the tax base. The first method – the simplified method – is 3% of revenues.
An alternative method is the method in which the tax base is the sum of 1.5% of revenues and the surplus of debt financing costs and the surplus of intangible services purchased from a related entity.
Depending on the cost structure, the simplified method or the basic method may be more advantageous for the taxpayer.
If the amount of the minimum tax exceeds the regular CIT, then the amount payable to the tax office is the difference between the minimum tax and the regular tax.
The surplus of unsettled minimum tax in a given year may be settled in one of the following 3 years (in practice, this means that settlement of the surplus will only be possible if no minimum tax is due).