From May 2021, limited partnerships will be subject to CIT, announced the Minister of Finance, Funds and Regional Policy, Tadeusz Kościński. The draft changes in this matter aroused a lot of controversy.
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“We are in constant contact with business representatives. Their opinion counts for us. We understand the difficulties they have to face due to the changing epidemic situation. That is why we give them more time to prepare for changes in the law – the acquisition of CIT limited partnerships will start apply from May 2021 ” – wrote on Twitter of the Ministry of Finance Kościński.
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Last week, a draft providing for, inter alia, covering limited partnerships with CIT. According to its provisions, most of the new solutions would enter into force on January 1, 2021.
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Changes
It concerns a draft amendment to the act on personal income tax, the act on corporate income tax, the act on flat-rate income tax on certain revenues earned by natural persons and certain other acts. Its goal is – as the Ministry of Finance argues – to include fight against tax avoidance, as the results of the inspection indicate that limited partnerships are increasingly used as “vehicles to divert funds to tax havens”.
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In addition to granting a limited partnership the status of a taxpayer of income tax and extending the scope of estimating the value of transactions, the draft also provides for, inter alia, that the limit of revenues from the current tax year entitling to use the reduced CIT rates will be raised from 1.2 to 2 million euros.
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In the act on the lump sum, the income limit will be increased – from 250,000 to up to EUR 2 million – conditioning the choice of a lump sum. Some lump sum rates are also to be reduced.
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Controversies
The Ministry of Finance’s project was criticized, among others by opposition parties who argued that the new regulations would bankrupt many Polish limited partnerships, and that entrepreneurs would have too little time to adapt to the new regulations, which were not subject to sufficient consultation.
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The changes are also criticized by organizations associating entrepreneurs. “The application of CIT to limited partnerships will lead to a significant increase in taxes for nearly 73 thousand Polish entrepreneurs” – it was written in the prepared report by CRIDO, the Union of Entrepreneurs and Employers and InfoCredit.
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photo-source">Main photo source: Radek Pietruszka / PAP
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