According to recent amendments to the Tax Code adopted on 24 December 2015, advance corporate income tax payments due upon distribution of dividends should be offset against the taxpayer’s outstanding corporate income tax liabilities in the same tax reporting year.
According to Tax Code, a taxpayer that decides to pay dividends to its shareholders must withhold and remit to the state budget advance corporate income tax on the dividends without reducing the amount of dividends paid. The advance corporate income tax on dividends may be offset against the corporate income tax due. If the amount of advance corporate income tax on dividends exceeds the amount of corporate income tax due in that tax period, the excess amount may be carried forward to decrease future corporate income tax liabilities.
The amount of advance corporate income tax that was not offset in the same tax reporting year will not be carried forward to the next tax reporting year. The amendments are effective from 1 January 2016.
