On 30 September 2020, the Polish lower house of Parliament approved the Bill No.643 that provides for the introduction of an optional “Estonian” corporate income tax (CIT) regime for small and medium enterprises (SMEs). The new tax regime is provided due to the corona-virus pandemic (COVID-19) and will apply from 1 January 2021.

The new regime includes the following measures:

• Provide a comprehensive model under which companies would be subject to a flat tax, based on the Estonian regime
• Provide a corporate income tax exemption for qualified SMEs, including LLCs and joint-stock companies
• Apply the regime to qualified SMEs whose annual income must be lower than PLN 100 million
• Apply the regime for 4 years with an optional 4-year extension, even for small and medium enterprise’s exceeding the revenue threshold.