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Lower CIT and unification of VAT rates – Ministry of Finance revealed the planned simplifications


In a recent interview for Rzeczpospolita, Teresa Czerwińska, Minister of Finance presented the modifications on which the Ministry is currently working and which – in the opinion of fiscal authorities – are to facilitate running business, stimulate entrepreneurship and innovative activities in the economy.

Entrepreneurs will certainly welcome the introduction of a new CIT rate of 9%, replacing the current preferential rate of 15%. Micro-enterprises will be covered by the new rate. It is possible, however, that the catalogue of entities authorised to it will be further expanded.

At the same time, the Ministry plans to support investments by introducing preferences for those entities that, instead of paying dividends, will decide to allocate their profits to investments. The preference will enable to report hypothetical interest (up to a certain limit) in tax-deductible expenses. The "innovation box" relief will also be introduced. Entities earning income from intellectual property protected e.g. by a patent, protection right for a utility model, the right to register an industrial design, or copyright on a computer software will be entitled to apply a reduced rate of tax. Thus, the introduced modification concerns the phase of commercialisation of intellectual property – taxable sale of patents or licenses would be more advantageous than before, which encourages companies to be more active in their production. CIT rate which innovative companies will apply to tax the discussed revenues is not known yet. It should be emphasised that the already known relief for research and development will still remain in force.

Taxpayers of VAT may also count on great simplifications. The intention of the government is to depart from setting the appropriate VAT rate based on the Polish Classification of Products and Services for the benefit of the Combined Nomenclature (CN codes). This will allow for a single VAT rate for the entire group of goods, as a result of which in many cases the rate will be reduced (e.g. all fruits will be subject to a 5% rate). At the same time, the government plans to introduce the so-called binding tariff information, which will probably increase the security of taxpayers.

The Minister also confirmed the intention of moving away from the obligation to submit VAT that had already been announced – all data received by the exchequer is in the form of JPK_VAT files. The modification will most likely apply from 2019.

In addition to the modifications mentioned above, the government plans to change the rules for the settlement of company cars, e.g. increasing the limit of the value of a passenger car, to which depreciation write-offs are reported in tax-deductible expenses from 20,000 EUR up to 150 thousand PLN. The unpleasant duty of filling in mileage allowances is also to be removed. Among the modifications that we think deserve attention, there will also be an increase in the income limit for small taxpayers from 1.2 million EUR to 2 million EUR.

Draft amendments have not been published by the Ministry yet.

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Barbara Otrzonsek, tax consultant, ATA Tax Sp. z o.o.