A number of major tax changes have been introduced as of 1 January 2017. The changes are given below:
Personal income tax:
Personal income tax has a major change on the tax-free amount that is based on the tax base. In accordance with the new provision, tax deduction is not possible in case of when a taxable income more than PLN 127000.
Corporate income tax:
- The small corporate taxpayers are subject to 15% CIT instead of the standard rate of 19%. The reduced rate applies also to taxpayers starting their business;
- The investment incentive accessible to small taxpayers as well as established companies, whether business or individual taxpayers will be PLN 215,000 (EUR 50,000). It refers instant depreciation of fixed assets in the classification groups 3 to 8, excluding passenger car.
Transfer pricing documentation:
New regulations on transfer pricing applicable as at 1 January 2017 will lead to the situation where the obligation to formulate transfer pricing documentation will have to be analyzed.
- A new threshold has been introduced for the related party status that associate companies need to hold at least 25% (previously 5%) of equity interest in another enterprise;
- Taxpayers with more than EUR 10 million in revenues or expenses, need to prepare a benchmarking study and have to provide a summary report on transactions with associate enterprises along with a tax return.
- The regulation introduced new requirements for taxpayers. Taxpayers have to file their monthly VAT returns electronically and sign the VAT returns with an e-signature;
- The tax authorities calculates the correct VAT amount and impose an additional VAT sanction corresponding to 30% for the discrepancy. The sanction rate will go up to 100% in certain cases;
- Introduced an additional requirement to a fulfilled VAT refund amount within 25 days;
- The outstanding amounts under other invoices cannot exceed PLN 15,000.