Adam Radomski
Business Development Executive
The minimum tax (Lump-sum tax on registered revenue) is a form of taxation introduced as part of the “Polish Deal”, but it has been effectively in force since 1 January 2024. The purpose of this new levy is to prevent situations in which large companies declare low income or a loss while generating high turnover in a given year, and consequently have no obligation to settle corporate income tax.
The minimum CIT requires special attention from finance and accounting departments. The calculation of the tax liability is based on complex formulas that take into account the value of revenues, costs and specific exclusions.
Minimum CIT – for whom?
The minimum tax applies to companies settling taxes entirely in Poland, as well as tax capital groups that:
- incurred a loss from revenue sources other than capital gains;
- achieved an income share from revenue sources other than capital gains, within revenues other than capital gains, not exceeding 2%.
The minimum income tax also applies to limited partnerships and limited joint-stock partnerships, which became CIT taxpayers in 2021. It is worth noting that the 2% profitability threshold is a key indicator determining the tax obligation. Companies that regularly use tax advisory services, can more effectively monitor their situation and identify potential risks associated with the new tax at an early stage.
Minimum income tax at KR Group
The minimum revenue tax requires companies to maintain detailed financial documentation and continuously monitor profitability ratios. KR Group provides comprehensive services encompassing both the analysis of the current tax situation and long-term strategic planning. Working with experienced specialists enables the identification of areas requiring special attention and the implementation of appropriate organisational solutions.
Companies using accounting outsourcing gain access to a team of professionals who continuously monitor changes in tax regulations.
Minimum CIT – KR Group offer
- Verification and simulation of the company’s income level.
- Analysis of costs and other parameters determining whether the tax applies and its amount.
- Calculation of the minimum tax in the event of exceeding the 2% threshold.
- Advisory services related to tax planning aimed at minimising the impact of the regulations on the company’s tax burden.
FAQ
What is the minimum income tax?
The minimum tax has been effectively in force since 1 January 2024, with its first settlement occurring in 2025. It also applies in subsequent years. For this reason, it is already worth preparing and conducting the appropriate analyses: simulating income and cost levels for a given year in order to determine the potential risk of becoming subject to this form of taxation. Our experts have analytical tools that enable precise forecasting of tax liabilities. This is a form of taxation directed at entities with low profitability or a tax loss. It applies to companies whose income share in revenues does not exceed 2%, as well as those that have incurred a loss from operational revenue sources. Knowing who the minimum CIT was introduced for makes it easier to assess whether a given company is subject to the new regulations and to prepare adequately in advance for any additional tax and reporting obligations. These provisions have been designed in a way that compels business entities to conduct a thorough analysis of their revenue and cost structure.
The minimum CIT and who bears the associated financial and administrative risk are matters that must be assessed on an individual basis, taking into account the specific characteristics of the company, the industry and the cost structure. Our many years of experience serving clients from various sectors of the economy enables us to precisely tailor recommendations to the needs of each organisation.
How to calculate the minimum CIT?
The tax base for the minimum tax is the sum of 1.5% of operating revenues and certain costs, such as debt financing costs or costs of intangible services. Tax is calculated on this base at a rate of 10%. The minimum income tax may be reduced by the amount of CIT due calculated on general principles, which represents a significant simplification for many entities.
Minimum CIT – who is it intended for?
Minimum CIT – who is it intended for? This is a question many entrepreneurs ask themselves. The answer requires a thorough analysis of the revenue and cost structure of the entity in question. Importantly, the legislator has provided for a number of subjective and objective exemptions. Among those exempt from the payment obligation are entities commencing operations – for the first three tax years, financial enterprises, and companies whose revenues fell by at least 30% compared to the previous year. Our offer in the area of minimum income tax services covers a wide range of services tailored to the needs of companies of various sizes.
The minimum revenue tax represents a significant challenge for many businesses operating on the Polish market. These regulations apply exclusively to legal entities – capital companies and tax capital groups. Sole traders are not subject to these provisions.
Minimum CIT – what are the challenges?
The minimum revenue tax is a challenge that requires a professional approach and in-depth knowledge of the regulations. KR Group is a dynamically growing organisation providing services in Poland, the Czech Republic, Romania, Hungary and Slovakia. The breadth of our offer, our partnership approach and our extensive experience in serving clients from various industries mean that we understand the realities of business and can tailor solutions to the individual needs of each organisation.
The minimum CIT requires a comprehensive approach covering both accounting and tax aspects. Our specialists conduct detailed audits, identify potential risks and propose specific corrective actions. Cooperation with KR Group is a guarantee of professionalism and tax security. This enables companies to effectively prepare for the applicable regulations and reduce the risk of unforeseen tax burdens in subsequent years of operation. Our tax and accounting group offers comprehensive support in the interpretation and application of these provisions, helping clients avoid unexpected fiscal burdens.
Who will be obliged to pay this tax?
The new form of CIT applies to taxpayers who have incurred a tax loss or income not exceeding 2% of revenue value.
I am just starting a business – how can I estimate whether the minimum tax will apply to me?
Estimates suggest that one in four CIT taxpayers will be required to pay the levy. As a rule, companies that are commencing operations 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.
Has the legislator provided for any exemptions?
Yes, entities exempt from the minimum tax will include, for example: those commencing operations, those placed in bankruptcy, liquidation or undergoing restructuring.
