Amendments to the CIT Act

Polish Parliment passed an amendment to the CIT Act this week to suspend the minimum tax provisions for two years and extend the anti-inflation shield until the end of 2022. The new legislation suspends the minimum tax provisions for two years, extends the anti-inflation shield until the end of 2022 and maintains the VAT rates at 8 and 23% for the year.

Extended anti-inflation shield

The law includes provisions that extend the anti-inflation shield from 31 October 2022 to 31 December 2022. This means that the temporary reduction of VAT rates on: food, fuel, natural gas, electricity and heat and fertilisers will be maintained. For the following year and beyond, VAT rates will be maintained at 8% (reduced rate) and 23%. (standard rate).

As a reminder, among the most important modifications enshrined in the Act, there were also changes to the regulations and the postponement of the entry into force of the minimum income tax regulation (suspension for 2022-2023) while changing the profitability threshold at which the minimum tax is applied, the repeal of the provisions on the so-called hidden dividend and the amendment of the provisions on the documentation obligation for so-called indirect domestic transactions, as well as those relating to the Polish holding company (PSH).