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Poland to introduce Estonian system for its CIT

Radical overhaul coming

editor: REMIX NEWS
author: Do Rzeczy

Prime Minister Mateusz Morawiecki announced recently that his government will introduce within six months a new corporate income tax policy modeled after the Estonian system.

The system allows a business owner to remain exempt from paying corporate tax until the business reaches the point that it can pay out dividends. This provision will cover 97 percent of limited liability and joint-stock companies, meaning that they will only have to pay tax on payment of dividends to their owners or shareholders. 

This will mean that companies will rarely have to file CIT returns, says Piotr Arak, director of the Polish Institute of Economics.

This should help Polish companies reduce the time they have to spend on CIT returns from 59 hours per year to the five hours it takes for Estonian companies.

This will improve cash flow for companies in Poland, according to Arak, freeing up resources for investment. This should also help ease burdens during a downturn.