Ministry of Finance wants to lower taxes for small enterprises

Ministry of Finance prepared a draft act on lowering the rate of corporate income tax for small enterprises. Thanks to this, around 90% of corporate taxpayers will be able to capitalize on the reduced 15% corporate income tax rate.

According to the proposed solutions, the reduced corporate income tax rate will apply to taxpayers whose profit on sales together with the output goods and services tax did not exceed the equivalent of 5 million PLN in the previous year. This will also concern the taxpayers starting their businesses.

The changes are to back up the taxpayers for whom difficulties in raising capital for new investments and fierce competition is a considerable handicap for running or developing a business. The Ministry of Finance’s strategy is aiming at building advantageous environment for company growth.

In the long-term perspective, the initiative should have positive effect on enhancing the development and creating favourable conditions for boosting entrepreneurship in Poland as well as entrepreneurship among young people.

In the draft act it has also been proposed to eliminate the interpretative doubts that may result in tax avoidance with respect to some profits. Among other things, this is about changing the rule of determining revenue on taking up shares in a company in return for a contribution in-kind in form other than a company or its organized part. In this way the possibility of “artificially” generating losses will be eliminated.

Facilitation and tightening are the rules the Ministry will stick to when designing the new tax law. That is why along with cutting tax rates for newly founded companies, tax loopholes allowing money to escape are closed.