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The domestic minimum income tax (Article 24ca of the CIT Act) was formally introduced in Poland in 2022, but the legislator suspended its application for two years. This means that 2024 is the first year for which entrepreneurs must settle it in accordance with Article 24ca of the CIT Act.
The main purpose of the domestic minimum tax is to ensure that companies operating in Poland, even if they show low income or losses, pay the minimum tax to the state budget. This regulation is intended to counteract situations in which entities generating high revenues do not pay income tax, e.g. as a result of using various tax optimisations or incurring significant operating costs.
New tax obligation – who must pay the domestic minimum corporate income tax?
The following persons are obliged to pay the domestic minimum tax, after meeting one of the two criteria:
- Polish tax residents,
- non-residents who conduct business in Poland through a foreign establishment (to the extent that the revenue generated and losses incurred are related to the activities of that establishment),
- tax capital groups.
However, the regulations provide for a number of exemptions – e.g. for small taxpayers, financial enterprises, new companies or companies that are part of a group of at least two companies (in which case the settlement of minimum tax will not be mandatory after meeting additional conditions).
The minimum tax applies to taxpayers who meet at least one of the two criteria:
- they have suffered a loss from sources of revenue other than capital gains, or
- they have achieved a profitability not exceeding 2% – where this indicator is calculated as the ratio of income to revenue from sources other than capital gains.
It is worth noting that the calculation of the loss and profitability ratio differs from the principles applied in corporate income tax, as the regulations provide for certain exclusions that must be included in the calculations.
Support from tax advisors regarding the minimum tax
Due to unclear regulations, the possibility of calculating the tax base in two ways and the lack of explanations from the Ministry of Finance, verifying the need to fulfill the obligations in terms of calculating and paying the domestic minimum tax for a given tax year may cause many problems for Polish taxpayers. All the more so because, in practice, settlements in accordance with art. 24ca of the CIT Act require not only knowledge of the regulations and the ability to interpret them correctly, but also knowledge in the area of financial analysis.
RSM offers professional tax advisory and consulting services, including comprehensive support that will help you avoid many potential problems.
Domestic minimum income tax – how do RSM Poland experts help taxpayers?
- We provide you with the Minimum Tax Calculator and, in case of any doubts, we provide substantive support from our tax advisors.
- We offer comprehensive support:
- We verify whether your company can benefit from any of the exemptions from the minimum tax.
- We calculate the 2% break-even point, taking into account all possible exemptions.
- We calculate the tax base for the domestic minimum tax in two variants – classic or simplified – adapting the methodology to the specifics of the company's business, taking into account all possible deductions (e.g. R&D relief).
- We determine the amount of the domestic minimum tax to be paid to the tax office.
- We offer assistance in reporting and filing declarations, which includes comprehensive support in preparing the necessary documentation.
Why is it worth using the support of RSM Poland tax advisors when verifying the obligation to calculate the minimum tax?
The first settlement of the domestic minimum tax is a challenge for many companies, because the regulations are new and complicated. At RSM Poland, we perfectly understand that the process of verifying the obligation to calculate may raise doubts, especially in the context of available exemptions, calculation methodologies and the impact on current CIT settlements.
Our team of experts will help your company go through this process smoothly, offering comprehensive analysis, precise calculations and practical support in interpreting regulations.
If you have any additional questions or would like to use our support, please contact us – we will be happy to discuss our personalised solutions tailored to your company’s needs.
