Estonian CIT - the draft bill after consultation with business submitted to the Parliament

Oct. 5, 2020 Poland

On 30 September 2020, a draft amendment to the CIT Act has been submitted to the Polish Parliament (the Sejm), which introduces a new system of income taxation for some of the companies - the so-called Estonian CIT.

We wrote about its basic assumptions here and the other one here.

The new draft bill includes some of the comments and demands made during the public consultation process. Among the proposed changes the attention should be drawn to the following:

  • doubling the revenue cap for companies which will are about to use the new model - from PLN 50 million to PLN 100 million per year (including the amount of VAT due);
  • easing employment condition:
    • the Estonian CIT also applies to companies engaging individuals under civil law contracts (not only on the basis of employment contracts),
    • a small taxpayer may employ 1 employee instead of 3 (other than shareholders) in the first tax year;
  • making the minimum investment condition more flexible, including the lack of investment condition for the first 2-year period;
  • possibility to submit information about resignation from Estonian CIT in the tax return submitted for the last tax year in which the taxpayer used this form of taxation;
  • possibility to settle the accumulated tax loss 2 years back before joining the Estonian CIT for taxpayers who decide to apply this form of taxation in 2021.

The draft bill may be further amended during the legislative process. About each of them, we will keep you informed.

If you have any questions about the Estonian CIT model, please contact our experts:

Łukasz Bączyk
Head of Tax, Board Member

Marta Skrodzka
Tax Manager - Tax Adviser

Jarosław Szajkowski
Tax Manager - Tax Adviser