Minimum tax

Check whether the new tribute pertains to your company

The minimum tax is another form of taxation introduced in 2021 as part of the "Polish Deal." However, in 2022, the Parliament suspended these regulations for two years. Along with the expiration of the suspension period, the minimum corporate income tax regulations have already taken full effect as of January 1st, 2024.

The minimum tax applies to companies making settlements entirely in Poland, as well as tax capital groups that:

have incurred a loss from a source of income other than capital gains
obtained a share of income from an income source other than capital gains, in revenue other than capital gains, of no more than 2%

The new form of tribute is designed to prevent large companies from declaring a low income or loss, but in fact having a large turnover in a given year and not paying the due income tax.

When does it apply?

Although the minimum tax took effect on January 1, 2024, its first settlement will be in 2025. It is already worth preparing and conducting applicable analysis: simulating the level of income and expenses for the year to determine the possible risks of being subject to this type of taxation.

In introducing another form of CIT taxation, the Ministry of Finance primarily aimed to tighten the tax system. The minimum tax is intended to curb situations in which large companies, despite generating significant turnover, regularly declare low profits or losses.

Łukasz Kempa

Tax Director

Our support

Verification and simulation of the company's revenue level
Analysis of costs and other parameters determining tax liability or tax assessment
Calculation of minimum tax, in cases exceeding the 2% threshold
Advising on tax planning to minimize the impact of regulations on the company's tax burden.

Contact

Łukasz Kempa

Head of Tax Advisory, Tax Advisor

l.kempa@krgroup.pl

(+48) 539 677 518

FAQ

How to calculate the amount of tax?

According to the CIT Law, the minimum tax is 10% of the tax base. The tax base consists of a portion of revenue and certain deductible expenses incurred for the benefit of affiliated entities. In addition, the regulations provide for numerous and significant exclusions affecting the tax base.

Who will be required to pay this tax?

The new form of CIT covers taxpayers who have incurred a tax loss or income not exceeding 2% of the value of revenue.

I am just starting a business - how do I estimate whether the minimum tax will be applicable?

Approximately one in four CIT taxpayers will be required to pay the tribute. As a rule, start-up companies will not be subject to the tax. It is already worth contacting an expert who will conduct a detailed analysis of your business model to determine when and to what extent the company may be affected by taxation.

Did the legislature provide any exemptions?

Yes, some entities will be excluded from the minimum tax, for example: start-ups, companies in bankruptcy, liquidation or restructuring. We wrote more on this subject in the article: Minimum tax returns