Initiative to Reduce the Corporate Tax in Poland for SMEs by 4 %
Posted: 2016-07-11
Small business owners in Poland will benefit from the latest tax changes adopted by the Polish Government. A new bill that has been adopted by the Government will allow the reduction of the corporate income tax by 4 percent, for small businesses. This measure was taken as a means of encouraging investments in Poland, particularly small business owners.
The reduced Polish corporate tax
The corporate tax reduction measure is implemented by the Polish Government as a business aid for small Polish companies that want to develop and raise capital. The measure also intends to help these smaller businesses consolidate their position on the Polish market.
The bill to reduce the corporate tax from 19% to 15% has been passed by the Government and is currently waiting for the approval of the Parliament. If the second approval takes place soon enough, the new corporate tax for small companies could become effective as of January 1, 2017.
Small and medium-sized companies are an important contributor to the Polish economy. These business structures are preferred by entrepreneurs and young investors who are developing start-ups. The limited liability company is a preferred business form for small business owners in Poland.
Taxation in Poland
Corporate taxation is levied in Poland based on company residence. A resident company is one that has its management place or registered seat in Poland. Resident companies are taxed on their worldwide income while non-resident companies, like branches in Poland, only on their Polish source income.
Branches in Poland are usually taxed in the same manner as subsidiaries. The current applicable corporate tax rate for all companies is 19%. There is no surtax and no alternative minimum tax, until the approval of the Government bill.
Other taxes for companies in Poland include the real property tax, the transfer tax, the stamp duty, the capital duty, the excise tax and the social security contributions payable by employers in Poland.
For more information about taxation for different types of legal entities, you can contact our Polish lawyers.